Looking at the AUD/USD 2H chart, we can see the market has a very clear structure, with a recurring technical pattern for us to utilize. The overall market structure is that of a descending channel, meaning we are looking to short the market. Looking at previous swings highs (which were good shorting opportunities), we can see that each one involved 4 technical factors:
1. price trading at the upper channel descending line
2. stochastic at overbought or near overbought levels
3. price trading above the 20 EMA
4. price trading at the 50-61.8% of the previous down move
The AUD/USD is currently trading at the lower channel point, with a low stochastic reading, below the 20 EMA. Therefore, our plan of action is simple rule following, looking for another technical confluence of the above mentioned kind. If the AUD/USD bounces back and fulfills our conditions, we're with-the-trend sellers.
1. price trading at the upper channel descending line
2. stochastic at overbought or near overbought levels
3. price trading above the 20 EMA
4. price trading at the 50-61.8% of the previous down move
The AUD/USD is currently trading at the lower channel point, with a low stochastic reading, below the 20 EMA. Therefore, our plan of action is simple rule following, looking for another technical confluence of the above mentioned kind. If the AUD/USD bounces back and fulfills our conditions, we're with-the-trend sellers.