The AUDUSD has broken out of the strong ranging box it has been in the the past few weeks with price in the last two daily sessions breaking out through the support and moving lower. We can see this pair like so many other Forex pairs right across the market lately has been in a tight range and sideways trading of late. Price breaking out could finally signal the resumption of a trend and free flowing trading for traders to take advantage of which could be very SIGNIFICANT so traders should be keeping a close eye on what goes on over the coming days.
Now that price has broken out lower, traders could look for the old break out support area to “flip” and act as a new resistance area that could also act as a solid area to make short trades. To read more about price flips and how to target price flipping zones as high probability areas to make trades see here: Price Flip Zones as High Probability Trades. If price does continue to move lower there is room to move into the next support around 0.8850.
We can see on the chart below that this move lower was kicked of by a bearish engulfing bar (BEEB) on the daily chart that was rejecting a proven resistance area. As soon as the low of the BEEB was finally taken out, price collapsed lower and through the breakout boxing area.
I have recently published a new article which discusses how traders can start making trades from better areas on their charts and making higher probability trades. To read this article see here: Trade Like a Sniper From Price Action Kill Zones
AUDUSD DAILY CHART | 1 AUG 2013
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