The AUDUSD has moved lower and broken through a key support level after breaking the low of a bearish engulfing bar (BEEB). This BEEB was formed rejecting a key resistance level. Once price broke the low of the BEEB it got a lot of momentum and broke through the key support level which may now look to act as a price flip level and new resistance level.
Should price now move back higher, this price flip level may now look to act as a new resistance zone for traders to hunt short trades on their intraday charts such as 4hr and 8hr charts. If you are not sure how to make 8hr charts on your MT4 platform you can read about how to change your MT4 time frame to make them any time you want here: Tutorial on Making Any MT4 Time Frames That tutorial will show you how to make any time frame you need.
Making a trade on the 4hr chart at this new resistance level would be trading in-line with the recent strong bearish momentum and at a daily key level. Any potential trades would only be confirmed at this solid level with high probability price action signals such as the ones taught in the course at Forex School Online.
AUDUSD Daily Chart
hello johnathon, thx for the article but i’m a little confused and wonder if the price can move even lower easily as we could see at the left side of the chart, there’s quite many support areas there.
Heya Fazily,
That’s why you would not be taking a short trade from where price is now, but you would only be looking to take short trades if price moves back higher and back into a key resistance level. If price moves back higher and into the key daily resistance there would then be space to move back into on the 4hr chart to trade back into.
Johnathon