Direct from the desk of Dane Williams,
This is not your average forex broker email.
Did you read today’s daily market analysis on the blog? I took a look at the AUD/USD higher time frame resistance zone that price has now pulled back to test.
Just so you have it here too, here is the important AUD/USD daily chart from the analysis.
So you may have finished reading today’s blog and thought “well that didn’t tell me jack shit about whether price is above or below the zone.”
Yes, I left things quite ambiguous on the blog because quite frankly, we don’t know which way the market is going to go yet.
Price is retesting higher time frame support/resistance. That’s all price has told us!
If the zone holds, then we will zoom in and look for intraday, short term support turned resistance to short off.
If the zone is broken out of, then we will zoom in and look for intraday, short term resistance turned support to buy into.
What I did want to highlight for you, is the recent intraday price action in AUD/USD and then talk about trading it.
Zoom into your intraday charts such as the hourly below. I’ve also got the MT4 period separators in so each day’s price action is clear.
So what are we looking at here?
Well, you can see that on Friday, price pretty much rallied all day.
Price then stalled just before NFP, printing the short term resistance level on the hourly that we would look to then be retested as support to confirm a low risk long entry.
Pause for the weekend…
We then open up again on Monday, price drops back into our short term resistance and retests it as support.
Normally, this would be the exact scenario I’d look for in order to get long. But you can see that price is smack bang inside that higher time frame resistance zone…
So, where does that leave us, in terms of trading AUD/USD?
All that matters is how you view the higher time frame support/resistance zone from the daily chart above.
You think a break of the bottom line is enough to say that price is back above higher time frame support/resistance, so that intraday setup is prime to be immediately longed.
You’re of the opinion that price is right smack bang in the middle of a greater resistance zone, so there’s no way in the world that this is a long just yet.
If you’re a number 1, then you’re using the above intraday scenario to get long.
If you’re a number 2, then you’re going to wait and see if price in fact drops back below the higher time frame resistance zone and then you’re going to look to short it.
Do you have any questions about this setup or my analysis? Hit reply to this email and let me know. I read and get back to anyone in my Inner Circle who takes the time to chat.
Best of probabilities to you,