AUDUSD – retest of the breakout: Short Entry point

The Australian dollar is seeing a recovery with the formation of double candlesticks – two divergent bearish/bullish tweezer kendalls.

Daily Chart

• Consolidation breakout
• Retest of support breakout
• Correction to 23.6 Fib
• Sequence with downward printing
• DeM oscillator volatility
• Healthy retracement of Aussie oversold the previous 5 trading sessions

China’s economy continues to sink, which is having a strong negative impact on the Australian dollar, as the country’s major trading partner. A break of the rectangular and exit from choppy trading, confirms the negative sentiment towards the currency. A correction to 23.6 and a return to retest the breakout provides good levels for positioning on momentum.

H4 Chart

After forming the corrective move, the H4 shows signs of an end to the correction and continuation of the short. Pin bar formation, the break of which at 0.644 will trigger new sells. A secular ahead of the formation of a 9ka, which will consolidate the end of the bullish momentum.

Trade: Speculative Short 0.6434, SL 0.649, Target 0.634 / 0.63

Alternative: A close above 23.6 Fib / 0.645 would mark a fake breakout and bring the cross trade quotes back into consolidation.