Hi Traders! EURAUD bearish convergence provides bearish opportunity for us. A detailed analysis of this sell setup is as follows:
EURAUD D1 Chart:
On the daily chart the price has created a classical setup, we had a bearish divergence and then the price moved lower and created lower lows thus forming a bearish convergence for us, we may consider this as an evidence of bearish pressure. As per the book scenario we may now expect pullbacks to happen and currently it looks like a pullback is happening. We may now look for more bearish evidences on lower timeframes in order to join the bears.
EURAUD H4 Chart:
On the H4 chart we have a five leg structure that has completed itself and then the price which was moving higher reached the 50% retrace zone of this cycle and is currently moving lower. In addition to this we have a bearish hidden divergence which we may consider as an evidence of bearish pressure. We also have a good uptrend line that has formed and if we get a valid breakout below this dynamic support, we may then start looking for sells with more bearish evidences.
Note: 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.
Not sure how to spot reversals (bounces)? Not sure how to spot breakouts?
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Yours to your success