Resistance and support lines in the Aussie define a broadening formation – one that has characteristics of high volatility with little direction. Traders would typically be on the lookout for swing trades at the turning points.
Broadening formation in Aussie defines swing highs and lows
The intraday chart can provide more clues to the trader and few techniques can do so better than chart patterns since it deals exclusively with price action. An inspection of the hourly chart and each of the swing high and swing low reveals powerful reversal patterns.
The January swing high shows a ‘head and shoulder’ pattern where traders can look for a short into the right shoulder. A confirmation is given when price moves below the neckline. While a pullback cannot be guaranteed, price made a pullback allowing late bears an entry.
The recent swing low is no different. Price printed an ‘inverted head and shoulder’ that gave a high probability chance to go long at the right inverted shoulder. A classic confirmation is given once again at the break of the neckline and a throwback completes this highly recurring formation.
Intraday charts provide critical clues for swing trade
