Tuesday, May 22, 2012

AUDUSD Analysis

This pair has been on a clear decline over the past 3 weeks.

As seen from the H4 chart, bears are firmly in control. Notice that price has recently broke out of the downward ED channel. However, we still prefer to go short and follow the trend - the trend is your friend, make it the number one consideration when deciding to take a trade.

 The yellow region could be a bull trap luring traders into thinking that the trend has changed. In essence, I feel that it is merely a setup for institutional sellers to sell at a higher price. Don't get fooled!

Price was resisted at 0.99349 (bearish candlestick pattern) which turned out to be a support in D1.

Bears can look to sell this pair if price manages to close 0.9875. Alternatively, you could use your trading strategy to time your entry.

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