Disclaimer : This is not investment advice. Past performance is not an indicator of future results.
Indicator used: MACD Moving Averages
Hi Traders! AUDUSD trend line breakout provides sell trade opportunity for us. A detailed analysis of this bearish setup is as follows:
AUDUSD Daily Chart Analysis – Bullish Channel
On the daily chart the price is moving inside a bullish channel which started on 7th August 2019, this channel is formed by the price reaching parallel resistance and support zones. The price is respecting these two zones so far and currently it is below the middle of the channel after bouncing from the top. We may now look for bearish setups with bearish evidences on lower timeframes in order to join the bears.
AUDUSD H4 Chart Analysis – Support And Trend Line Breakout
On the H4 we had a bearish divergence that has formed between the first high at 0.68826 and the second high at 0.69295 based on the MACD Moving Averages indicator which we may consider as an evidence of bearish pressure. Then the price moved lower and broke below the important support zone at 0.68100 and also it broke below the uptrend line as well, we may consider these as evidences of bearish pressure. We may now look for possible pullbacks to happen and then we may start looking for sells with more bearish evidences (candle stick patterns, false breaks, trend line breakout etc…).
The combination of daily bullish channel with the bearish divergence and the breakout of the important support zone and uptrend line could provide us a good sell trade opportunity. We may now look for possible pullbacks to happen and then we may start looking for sells with more bearish evidences.
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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