AUD/USD Is Forming A Reversing Bearish Pattern. Is Our Signal Safe?
Skerdian Meta • 1 min read
About 3 weeks ago we opened a long term sell forex signal in AUD/USD. This forex pair had been pushing upward for quite some time and at the time, it seemed like the USD weakness was wearing off.
The daily candlestick had formed a doji and the daily chart was overbought, so we decided to take the shot. It went well the first week – by the end we were more than 100 pips in profit.
But, as we now know, things have changed drastically. US inflation figures disappointed once again and AUD/USD changed directions.
It relentlessly climbed higher and early this morning it had a quick try at the massive 1.80 level. This is a big round number and a line in the sand for this forex pair and for its traders since there are not many other technical indicators above to provide resistance.
If this level goes, then the sellers might as well throw in the towel.
But, this is not happening today. After the quick try earlier, the price has reversed and we are nearly 100 pips lower now. The daily candlestick is shaping up to be a bearish engulfing one since it engulfs yesterday's bullish candlestick, both in size and in shadows (wicks).
This is a promising sign for bears and it looks like they are becoming more confident after winning the first battle at 1.80. We seem to be safe for now in regards to our long term AUD/USD signal. All timeframe charts (daily, weekly and monthly charts) are overbought, so we might see a decent retrace lower or even a reverse. So, we're holding on to our trade.