The Aussie / USD has been on a downtrend since the end of January, and looking at those big fat tails on the bearish candles, we'd say the move down was complete, but you'd be wrong.
A bearish RSI on a weekly time frame is indicitave of a continuation. but that's not enough, various signals in US equities and bonds show us that the USD has much more strength in it, and while the Aussie has shown stength, nowhere near as much as the global currency.
So I'm bearish on this pair, looking for another leg down targeting the 61.8% fib level at 0.73270
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Look at the daily chart below, further evidence of the weakness, and with more signals to reduce the risk. Bearish tails at the moving average and a declining RSI, plus we're at a weak "point of control" on the Volume indicator. But remember, it's your trade, I'm selling now with a stop loss above the tails, see the orange box, it can easily retrace up first, go to a lower time frame to set your trade in the best position possible
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Even on a 1h timeframe, we still have a declining volume and a reasonable place to take a position. I'm adding a 2% trade, I may increase as it becomes more obvious, at pullbacks.
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No comment, other than, thank you.... fat gap down, can the Asian session take it further
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Already in this trade: 18/05/2018 - 11:00 @0.7504 have also added to my position
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The wicks are a great signal that the downturn is speeding up, as well as the moving average crossing over, volume is also declining and divergent, confident this will drop today.
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Progressing perfectly
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This trade is no longer bearish, we have a reverse H&S pattern signalling a reversal, once we break the baseline, I will exit this trade and become a bull.
Trade closed: stop reached
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Baseline of H&S pattern broke out, bullish move, target failed