AUDUSD Trading Analysis

by: @Colibritrader

Dear traders,

Last week I did cover AUDUSD. I shared with you my thoughts on Twitter and through an article on my blog. I took a small long trade and have already exited it.

I might be wrong or possibly I am right, but the reason why I did exit this trade (as usual) is price action.

If you remember, when I wrote the article I was looking at a major support level and the price was just making a new low, which was looking like a false breakout.

This bear trap was confirmed by price action and I took a long trade according to the steps explained in my trading course.

Supply and Demand Zones

AUDUSD Trading Analysis

So, why did I exit my trade?

That is a very good question, to whom it will be quite hard to answer.

This is one of those places where you are not sure if you have entered a trade too early or have gotten into the wrong trade, because the general trend is against you.

One way or another, I believe I did the right thing because price action is certainly showing me mixed signals.

  1. There is a minor resistance level as marked on the chart
  2. There are to bullish rejections (pinbars) that formed on the Daily chart

Based on these price action indications, I prefer to be neutral.

Bear in mind that I am still not looking to go short. I believe that the distance between the major support level and the resistance level that was just rejected is too small for a meaningful trade to take place.

I might be wrong, though.

The major reason why I could be wrong is that AUDUSD has been in a downtrend for a while now and this might give the sparkle for further slides.

If that is the case, then traders might be waiting for a small retracement back to 0.7540 to short it.

For now, I am not going to take any course of action. I will just continue monitoring price action and if the right setup presents itself might trade it.

Happy Trading,

Colibri Trader

p.s.

Check out my recent article on If You Had To Stop Trading Tomorrow, How Much Would You Have Missed It.

Or simply e-mail me if you have any questions at: admin@colibritrader.com