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#AUDUSD could be about to start a retracement phase on the Daily timeframe.

In this video, we identify the best way to trade a retracement phase and what you would need to see to confirm the retracement.

Watch the video to learn more…

Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.

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In this video, we will go over AUD/USD since the price broke lower from the 0.8 level. 0.8 level is a nice big cycle; I call level on the AUD/USD. The price has recently come and retested that and reacted quite negatively at this level.

One thing to take note of is that the AUD/USD trend is to the upside. Typically, if you look at this market, I only want to be a buyer of it.

Now, we know that every time we’re going to take a video, we’re talking about the impulse moves and retracement moves in the market, and how the lower timeframes react in those different moves.

So, in the retracement move, for instance, we’re likely to see a four-hour downtrend. If the overall market is uptrending and rallies in the impulse moves, then the four-hour will likely uptrend in line with the market’s overall sentiment.

AUD/USD is heavily pushing to the upside and is now retesting 0.800.

I always look at this and go: “Where would I want to be a buyer from?” The main area for me would be back down, around 0.78. The reason is that we have multiple resistance at this point.

So, I would expect the market to come and retest this area. Now, whether it continues down or break to the upside, we don’t know at this point yet. Sentiment may change it but for me, the price will likely test this level if we see a pullback.

The first time we are going to see a pullback is on the daily chart, forming this bearish. If it does form this bearish close, we’ve got a few hours left before the day’s close. But, if this does close like this, there could be a potential to look for a reversal trend.

What I would look for is a change of trend in the four-hour timeframe. You can see in that impulse move – look – the market is making higher highs and higher lows. It’s very simple to jump on the back of those moves. On this occasion, we don’t have that yet. However, if we were going to see the retracement, the current low will likely break down to7890.

One or two things will happen: it might take out the low and continue down or form a reversal pattern like a double-top pattern, allowing us to look for the continuation to the downside.

At the moment, it’s still looking like the price is still very bullish. If I highlight this area here, even though yields are sky-rocketing which is helping the US Dollar bulls, there is still an option to look for a potential last effort long on a trend-based strategy here.

If you were looking at the trend, you would want an opportunity for the market to double-bottom in this area and continue back up towards a 0.8 level.

The longer-term outlook looks a little bit different because of that daily candlesticks set-up. It’s looking like the price wants to be traced. If it does, then we will expect the four-hour trend to change, and we’d look for short opportunities back down to the key support.

I hope you enjoyed this video update, and I’ll see you in the next one.

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