The AUDNZD has formed double inside bars on the daily price action chart. After forming a large bearish engulfing bar (BEEB), price has been unable to break either the high or low of the engulfing bar with price starting a windup and forming 2x inside bars back to back. As I talk about in a trading lesson here; What Traders Can Learn From the Inside Bar the inside bar is not a great setup to use to enter reversal trades with, but it can be used to read the market and what the market may be looking to do.
After being in a sustained and clear down-trend, price over the last few weeks has been caught in a sideways range. Price has been trading in an overall larger box that has seen price chopping from higher to lower and vice versa, but without any clear trend or breakouts. This wind up and double inside bars are another sign that this pair is indecisive at the moment and traders looking to make trades in these types of sideways trading markets that are winding up tighter need to proceed with caution.
If traders look at the daily chart of the AUDNZD they will see that price is slowly from left to right consolidating tighter and tighter. Sometimes in these markets the best plays can be to instead of looking to make trades where there can be a lot of risks because price can become caught in the sideways movement, wait for price to make a clear break either higher or lower and then look to enter the market. Once the market has clearly shown it’s hand, the price action will then become a lot clearer and what direction to look for trades can become a lot more simple with lower risks and bigger upside. In the meantime traders can look at the plenty of other markets where price is not caught in tight sideways trading.
AUDNZD Daily chart
Special Note: To never miss a daily trade setup, new trading video, trading article or trading lesson, including part two of the new article I am putting out later today make sure you follow us on Google+, Facebook, Twitter and Youtube by hitting the buttons below!
THIS INSIDE BAR IS CLEAR BULLISH SETUP FOR 2R