FOREX Chart Of The Day: AUDUSD- Trend Reversal
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, head currency analyst.
Practice trading with a demo account
In this video, we’re going to take a look at AUD/USD. We’re looking for the market to reverse to the downside, the reason we’re looking for the market to reverse downside is due to the strength and weakness table.
We were looking at the Australian Dollar, and the fact that it was starting to lose a little bit of value. That it’s at an extreme area in terms of being overbought on the market and the Dollar gaining value. We were looking for the potential for Aussie to start moving lower, The Dollar starts getting stronger, ultimately looking for the petition to move to the downside.
What we noticed on the latest daily close was the fact that the market closed back within the previous candlestick range. I started seeing things like that, it suggests to me that we could start seeing that price move to the downside. So that’s what I typically look for when looking for reversals. It’s just looking at that price action, looking at the fact that we’ve broken out of this high in here, we’ve rejected that high through there, we’ve closed back within that previous candlestick range. If we were to see that price breakthrough that low there, I’d anticipate that market to drive to the downside.
Now another way we can look to check this is if we go to our four-hour timeframe, and we have a little look at the trend on the four-hour time frame. Now at the moment, the trend is up. We’ve got the market pulling back down, moving to the downside, then forming slightly higher highs and higher lows. But we’re looking for that downside.
What we want to be focusing on is the market potentially pushing and breaking through new lows. So you can see here, the market has recently retested that high, formed a sort of rejection candle of that. That suggests to me that we could actually come back down and break these lows here.
Essentially, we could be seen AUD/USD at the moment forming a double top pattern. If the market was to break these lows just through here, then that double top pattern would complete, and we could look for the continuation to the downside. So keep an eye on AUD/USD, look for the market to break these lows here, look for then the retest, and look for that continuation to the downside on Aussie.
I hope you enjoyed this video update, and I’ll catch you in the next one.
Test out your AUD/USD trading strategies without any financial risk through a free demo trading account with Blueberry Markets. From your quick account setup, to smooth fund deposits and withdrawals, our customer support team will be there to assist you in every step.