smartforexlearning
Long

Potential long reversal for AUDUSD after reaching 4H swing low

FX:AUDUSD   Australian Dollar / U.S. Dollar
On the 4H charts, the AUDUSD             is at a crossroads. Since around March 20, the pair has been in a downtrend. Especially the last "wave" was very clean and controlled. The pair reached the 161.80% Fibonacci extension and at the same time, we're at a previous swing low which acts as a strong support.

Today, this setup gets more interesting. The lower bounds of the support level were tested, over-reached a little, but then shot back up, forming a good size pin bar . The price is still staying below the moving average, but as you might know, I am now waiting until I see a strong drive up (creating the pin and drive reversal entry trigger I often trade).

The pin bar , together with the previous test of the support level , creates somewhat of a double bottom . If this holds, I could see the price reverse and move up, with some of the potential resistance levels mapped out in light blue. If the support level breaks, there is a lot of downside for this pair as well. I'm keeping my options open, with a careful long bias.

As I said, I'm waiting for a drive candle; a momentum candle to the upside. I have alerts set at 0.75200 and will re-evaluate the price action once the price reaches it.


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