Does a strong bounce for AUDUSD from yesterday’s lows give sellers a good entry?

April 30, 2014 by Nanakiver3

After breaking the 0.9315 on the downside AUDUSD dropped down to try and test the 0.9205 support but stopped 20 pips shy to trade 0.9225 this has set some clear levels now for AUDUSD with resistance at 0.9315 and support at 0.9225, I am not one to trade a break out due to the nature of stop runs in the forex space and prefer going down to a short term chart to get confirmation a top has formed, this does lead to me missing out on calling a top but it increases my success rate.

Below is an AUDUSD daily chart and we have what appears to be a head and shoulders pattern signalling a top is in place.

AUDUSD daily chart

AUDUSD daily chart

At the moment the bulls are in control and I am happy to be patient and wait for it to top out. We have some big macro events of the coming days that are likely to cause some dollar led volatility so it is worth playing the patient game.