AUD/USD is sitting on a major reversal spot. According to the theory there is a 80% chance of this pattern playing out. Importantly there is both time and price symmetry in this pattern.
From a market psychology point, this is the ultimate contrarian trade: China stock market got sold off, so the press says that has led to a AUD sell-off, Bloomberg article says...
Potential H&S pattern
I think USD is suffering from exhaustion after a solid run.
My conviction is largely due to negative divergence in RSI.
To my eye, this looks very much like a high probability trade.
Short at the Right Shoulder to build-up profits to again go short after breach of neck line.
Great carry trade pair, even when it stands still.
TVx
