AUDUSD Downward Channel April 13, 2017 , Thursday
Updated
Observation:
Price on a downward channel.
Price bounce off dynamic resistance with a bearish pinbar.
Price below 200ma.
Long upper wick means strong price rejection upward followed by red candle bar.
Analysis:
Price respects dynamic resistance has high probability it will move inside downward channel.
If price keeps creeping near dynamic resistance, expect a strong drop of price.
Conclusion:
Short with tight stop loss on the higher high tip of the wick because price may also break dynamic resistance and would move up to a bullish trend. If price breaks dynamic resistance, expect a bullish trend.
Price on a downward channel.
Price bounce off dynamic resistance with a bearish pinbar.
Price below 200ma.
Long upper wick means strong price rejection upward followed by red candle bar.
Analysis:
Price respects dynamic resistance has high probability it will move inside downward channel.
If price keeps creeping near dynamic resistance, expect a strong drop of price.
Conclusion:
Short with tight stop loss on the higher high tip of the wick because price may also break dynamic resistance and would move up to a bullish trend. If price breaks dynamic resistance, expect a bullish trend.
Note
Price respects Downward Channel.SHORT, place tight stop loss at the wick of the previous doji + 10pips for conservative trader.
Note
Lesson learned: Bearish pinbar, look for a retrace then as price curves down, there is your opportunity to short.
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