UPDATE & REVIEW: Analysis: AUDUSD - Patterns! Lots 'O Patterns!

FX:AUDUSD   Australian Dollar / U.S. Dollar
UPDATE: Well, obviously those last 2 patterns failed and the ensuing price action pretty much just threw all my analysis out the window! Just hate when that happens! I can accept losing trades as they are a fact of trading but I HATE tossing out some good hard work! Oh, well. On to the next trade. But hey, all was not lost! Overall, was able to pull almost 200 pips out of the recent consolidating price action before it nose-dived.

So let's analyze what happened. Why am I doing this? It's a habit I do is to re-analyze and dissect every trade that didn't work out and see what happened and why I might've missed it.

First, the fact that this pair nose-dived was NOT unexpected. I just wasn't expecting it so soon. If you've read my LONG TERM analysis on this pair (see Related Ideas: "AUDUSD: Analysis, Bearish Crab & Why You Should be Looking DOWN"), you'll know that I am VERY BEARISH on this pair and expect MUCH, MUCH more downside to come. This fact should've have put me on watch for any pattern that suggested prices were heading down....like that last bearish cypher pattern. I did in fact, take that cypher and took SHORT trades on it and held them all the way down to the lower trend line BUT I closed ALL my positions there. In retrospect, watching the price action AND seeing what was happening in the USDCAD             pair, I should've realized that there was a HIGH probability this pair was gonna make a break for it down! In hindsight, it was more than likely a case of being too invested in my own analysis to not see what was happening right in front of me.

LESSON: NEVER be so focused on the trees and not see the forest!

Last week, I posted a LONG TERM analysis on this pair and why I think it is VERY BEARISH and has a long way to go on the downside. You can see that analysis in Related Ideas: "AUDUSD: Analysis, Bearish Crab & Why You Should be Looking DOWN".

I also posted recently about these back-to-back patterns you see in the chart above (see Related Ideas: "UPDATE #2: AUDUSD             - Cypher TP1 Hit (+35 pips). So Now What?")

What I wanted to do here is give you a MEDIUM TERM analysis and focus in on what is happening during this consolidation phase this pair is in right now. In other words, how is this consolidation wave going to play out and where the trading opportunities may be.

I see two possible scenarios as to how things will pan out. That does not mean these are the only possible ways things will unfold but just what I think are the most likely.

Scenario #1
In this scenario, it's as simple as ABCDE. If this happens, I'll just keep looking for back-to-back patterns.

Scenario #2
In this scenario, there are 3 bearish patterns that all support this: a bat, a crab and a butterfly . In addition, there would be an AB=CD EXTENDED pattern (targets on chart). All 3 patterns would also complete at/near a MAJOR SR Structure.

At this moment, just gotta watch the price action and see what happens. As I state in the chart above, depending on which direction prices go, I'll look to the corresponding scenario.

If you like my analysis and find it useful, please take a second to hit that LIKE button and follow me. It takes some time to create these posts and I would like to know if you find them helpful. As always, agree or disagree, your comments are welcome.
For anyone following this trade, keep in mind that AUDUSD has high inverse correlation (normally 90+%) with the USDCAD pair. USDCAD has just broken through a long standing strong resistance zone powered by BOC bank rate news. Though the news release has little to do directly with AUD, it is still wise to observe for another hour or so to see what happens.

If you take any LONG positions, be sure to have firm S/L in place!

JasonSong EverythingForex
thank you.
Looks like Scenario #1 is relevant now. Thanks!
Not for sure yet! If you're short via the cypher, I'd hold positions while moving the stops to B/E so it's no-loss trade. Prices must go down to fill the bullish cypher and hit hte lower trend line befoe I'd say Scenario #1 is in play. At this point, prices can still turn around and go right up through the channel.
That's a superb ideas..!
EverythingForex PRO AhmadHassan745
Thanks! Let's see if I'm correct.....
Beautiful analysis!
Thanks! Hope you find it useful.
English (UK)
English (IN)
Bahasa Indonesia
Bahasa Melayu
Tiếng Việt
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Contact Support Ideas Published Followers Following Private Messages Chat Sign Out