AUD/USD Before & After 4 Hour Time Frame Thesis

September 17, 2018

Repost from Instagram 9-1-18

 
Below you can find the reasons why structure needed to move in the following way to see a continuation of AUDUSD’s bearish momentum👇
1. Break out of the short term ascending trend (Indicating this short term bullish momentum is coming to an end & potentially confirming to us that this ascending movement in fact is warranted as a liquidated movement)
2. Validate that short term lower lows have been made (Indicating to us that this previous bullish momentum is becoming more invalid + we are receiving continuation of AUDUSD’s bearish momentum)
3. Create a short term continuation pattern (Indicating to us a potential lower high is being formed + telling us liquidation is occurring, bearish trend continuation)
4. Break out of the short term continuation pattern (Creating short term lower lows=continuation of this bearish momentum)
5. Retest the previous broken level or trend and closing below (Confirming to us market momentum should push in the direction that we seek, bearish)
6. Our end target area for this trade setup was at the daily support due to the following reasons👇

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6a. AUDUSD is in an extremely critical area due to all the bearish momentum. At some point we are expecting some liquidation as price cannot push in a long state of direction without any profit taking. Therefore, any continuation trades of this bearish momentum are to be taken carefully.
6b. Structure just recently broke out of the short term ascending trend warranting further continuation of the initial bearish impulse however it doesn’t entirely warrant a complete continuation of the bearish momentum until lower lows are definitely formed.
6c. We can see the 0.7200 handle (daily support) has been a very guarded area by the bulls. Right underneath the daily support is monthly support at 0.7144. With this, we concluded it isn’t optimal to take a trade below the daily support and run it into a territory surrounded by bullish pending orders. Therefore, we the most optimal area to close would be at the daily support and if price surges through, we will take the continuation of that impulse or if price rejects, we will simply reassess.
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If you need anything legends, don't hesitate to send me a message on my website or send me message on one of these platforms down 👇

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