The Aussie or AUDUSD is as I write this blog post for you making a huge breakout lower and through the recent daily pause/support area. I am a little bit late today making the Daily Forex Market Commentary and price has already made a move on this pair, but that is actually a good thing because it now potentially sets up for a short setup should price make a rotation back and re-test the new resistance overhead.
What happens very often with these strong breakout moves is that price will make a strong breakout. A lot of traders will jump in and in this case start making short trades to get into the move lower. Often at some point a lot of these traders will want to take some of their profit out of the market that they have made from this quick strong move lower. This will then cause price to snap back and make another quick move higher. This is why it is so common for price to breakout – make a quick re-test of the same level it just broke out of and then once it regains more strong price action order flow it will continue in the same direction.
I discuss this strategy in-depth and how you can use it in your trading at;
Trading The First Test Support/Resistance Price Action Strategy
Price has made the strong breakout of the daily level, but it has not retraced yet and it very well may not. It if does, traders need to be on their toes and watching the price action on their intraday charts for high probability bearish price action trigger signals such as the ones taught in the Forex School Online courses to confirm any potential short setups.
AUDUSD Daily Chart
AUDUSD 1 Hour Chart
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