Disclaimer : This is not investment advice. Past performance is not an indicator of future results.
Hi Traders! We have AUDCHF sell trade setup based on MACD indicator divergence. A detailed analysis of this bearish setup is as follows:
Indicator used: MACD
Tool used: Fibonacci expansion and retracement
AUDCHF Analysis – Sell Trade Setup On Weekly Chart
On the weekly chart the we have a bearish hidden divergence that has formed based on the MACD indicator between swing high one on 14th April 2019 at 0.72722 and swing high two respectively on 3rd November 2019 at 0.68625 which we may consider as an evidence of bearish pressure. We may now look for more evidences of bearish pressure on lower timeframes in order to join the bears.
AUDCHF Analysis – Sell Trade Setup On Daily Chart
On the daily chart while measuring the whole move from the top at 0.72722 on 18th April 2019 versus the low at 0.64979 on 26th August 2019 we can see that currently a potential retrace is happening in the form of double wave up and the price has reached the 38.2% (0.67937) to 50% (0.68850) fibonacci retrace zones, we also have the 61.8% fibonacci expansion level of the double cycle coinciding in the same zone making this a critical one. In addition to this we also have a bearish divergence that has formed on both MACD Moving Average and MACD histogram indicator. which we may consider as an evidence of bearish pressure. Until this 38.2% to 50% fibonacci retrace zone holds we may look for more bearish evidences on lower timeframes in order to join the bears.
AUDCHF Analysis – Sell Trade Setup On H4 Chart
On the H4 chart we have a critical zone that has formed between 0.68323 – 0.68587 based on the fibonacci expansion levels of the cycles we have. Price has currently reached this critical zone, in addition to this we also have a bearish divergence that has formed based on both MACD Moving Average and MACD histogram indicator. We may now look for bearish setups with more bearish evidences in order to start looking for the sells.
The combination of weekly hidden bearish divergence, the daily fibo retrace zone with bearish divergence and the H4 critical zone with bearish divergence could provide us a good sell trade setup. We may now look for bearish setups with more bearish evidences in order to start looking for the sells.
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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