AUDUSD – SHORT – 15th May 2018
The daily chart gives us our bias for the following trading day and here we can see two clear rejection candles after a pullback in the down trend. Given this we were looking for a continuation to the downside. Due to the fact we were trading right into a D1 level we weren’t looking for a sustained move, just a short term play to take advantage of the bias.
On the hourly chart a head and shoulders pattern formed with a rising neckline, we can also see MACD divergence across the highs. As price broke down and triggered the H&S pattern it also broke and closed beneath the 50EMA. Given our D1 short bias, combined with the structure on the H1, we placed our order to go short on a return to the daily Pivot Point.
Due to the D1 level we placed our target at that level which also coincided with the S1 pivot level. Price hit our target for 1.63R and as we can see in the chart price has shown a reaction to the S1/D1 level.