AUD/USD - Bearish Opportunity with Head and Shoulder Pattern
The AUD/USD currency pair has recently exhibited a classic Head and Shoulder pattern, indicating potential bearish momentum. The price has broken below the neckline, which previously served as a strong support and trendline. Currently, the price is testing a key support level, suggesting a possible retracement from this area.
Chart Pattern Analysis:
The Head and Shoulder pattern typically signals a trend reversal, and the recent break below the neckline confirms this bearish sentiment. The neckline break indicates strong selling pressure, and the price action is now testing a critical support level.
Fibonacci Retracement Analysis:
The potential retracement aligns with the 50% to 61.8% Fibonacci retracement levels, providing a confluence of resistance around this area. This enhances the likelihood of a bearish trend continuation, also aligned with the trendline that has turned into a resistance zone.
Trade Setup:
Take Profit Levels:
Conclusion:
Given the technical analysis, the AUD/USD pair presents a potential short-selling opportunity upon a retracement to the resistance zone. The alignment of the trendline, resistance, and Fibonacci levels provides a high-probability trade setup. Traders should consider entering near 0.67100 with a stop loss at 0.67450 and targeting the take-profit levels as specified.
Note: As always, traders should conduct their own analysis and consider market conditions and risk management strategies before entering any trades.
Chart Pattern Analysis:
The Head and Shoulder pattern typically signals a trend reversal, and the recent break below the neckline confirms this bearish sentiment. The neckline break indicates strong selling pressure, and the price action is now testing a critical support level.
Fibonacci Retracement Analysis:
The potential retracement aligns with the 50% to 61.8% Fibonacci retracement levels, providing a confluence of resistance around this area. This enhances the likelihood of a bearish trend continuation, also aligned with the trendline that has turned into a resistance zone.
Trade Setup:
- Entry Point: Near 0.67100 (re-test of the trendline and resistance area)
- Stop Loss: Near 0.67450 (above the resistance zone to manage risk)
Take Profit Levels:
- TP-1: 0.66750
- TP-2: 0.66400
- TP-3: 0.66050
Conclusion:
Given the technical analysis, the AUD/USD pair presents a potential short-selling opportunity upon a retracement to the resistance zone. The alignment of the trendline, resistance, and Fibonacci levels provides a high-probability trade setup. Traders should consider entering near 0.67100 with a stop loss at 0.67450 and targeting the take-profit levels as specified.
Note: As always, traders should conduct their own analysis and consider market conditions and risk management strategies before entering any trades.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.