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AUDUSD Price Action Analysis – 31st Aug 2017
AUDUSD made a breakout by producing some solid bearish candles on the H4 chart. The price is now on consolidation. It might be the time for the sellers to wait for a correction and then sell the pair again from the value area. Let us have a look at the H4-AUDUSD chart….
Have a look at those three consecutive H4 bearish candles and the breakout at 0.79415. The price has been on consolidation. The last H4 candle is a bearish one, but has a long spike. Thus, a breakout from right here might not have huge selling pressure. However, if the price goes to the level of 0.79415 and produces an H4 Bearish Engulfing Candle, then selling the pair would get us some green pips with excellent risk and reward ratio. Let us have a look at the summary of the trade…
- Sell Limit Order: 0.79400
- Stop Loss Level: 0.80000
- Take Profit Target: 0.78500
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
There are two reasons that we are not eyeing to sell the pair where it is here right now.
- We get less reward for more risk.
- The previous candle is a candle with long spike and did not make a breakout
This means the breakout would happen by at least two H4 bearish candles. That does not attract traders. In this case, it would not attract the sellers. The best breakout is when the breakout candle is produced right at the support/resistance level and has less confusion or tiny spike.
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