This is a question posed to me on Twitter.
In my opinion, AUDUSD is highly probably down trend although some see it as up. Can these two views be exclusive? Not necessary as it is a matter of perspective and horizon.
The bullish view
For bulls, AUDUSD has been gaining since 2 weeks, so it is up trend.
Correct or wrong?
Correct but this is a short term view based on momentum and is applicable to those who have a short horizon and not expecting to hold any position for a few days.
The bearish view
For those who enjoy the challenge of aligning all trends to ride a big wave for the prospects of a few hundred pips, please zoom out.
- Year to year, AUDUSD is down with no sign of big reversal pattern. For those who want to see what big patterns look like, recall AUDNZD.
- Month – month trend questionable. There was a bullish expansion last month. However price is now back below September high which increases the probability that the October high break was false one i.e. wash n rinse.
- If October high was a wash n rinse , then AUDUSD is in fact following 1-2-3-4 bearish setup.
- Current 2-week price rally is likely retracement to retest point 2, a recurring theme that I even made a video on this topic before.
- Green zone from 0.7210 – 0.7280 (July low – September high) is a high probability resistance.
- In any case, buying now may be high risk since in as close as 20 pips, price will slam into lower boundary of resistance zone.
- For bears who agree with short, look for a bearish expansion below Week 48 low as signal for price to resume big trend.
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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