Just a while ago we opened a sell forex signal in AUD/USD. I was actually looking at EUR/UD but decided to go with AUD/USD instead for a few reasons.
Trading between 2 moving averages
- The previous candlestick formed an upside down hammer which is a reversing signal after a uptrend
- The hourly forex chart is overbought
- The H4 chart is almost overbought as the stochastic indicator approaches the top of the range
- The 50 SMA yellow is providing some solid resistance as you can see from the forex chart above
- The Australian Dollar has been the weakest among major currencies, so it´s safer to go against the weakest link
Besides the above reasons for our sell forex signal in AUD/USD, this pair has been declining in the last 4 out of 5 trading days, which means that the momentum on the daily chart is down.
So, this 50 pip climb today in the H4 chart is more of a retrace of the downtrend. Although the bigger trend is up there´s an even bigger trend which points down, hence the short term signal.
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