Today we’re going to look at a few key levels that have come into question including a recent trend break that may give us a short opportunity.
The first pair I want to talk about is AUDUSD, which recently broke support at .9325. From the look of things, this break in support may very well lead to a larger reversal. Of course we will need to see more before this can be confirmed.
That confirmation will be determined upon a retest of key support at .922. This level has acted as support previously and is also the swing low from May. A break here may give us the signal that a larger reversal is in the works.
Summary: Look for a price action buy signal on a retest of former support at .922. If we get a daily close below this level we can look for bearish price action to join the reversal.
GBPJPY is another pair that may be in the process of carving out a top. This market has seen an impressive rally since early 2012 that has accounted for 5,800 pips.
However it does appear that the pair is starting to slip as it broke trend line support on Wednesday. Today’s price action formed a bearish inside bar, however the risk to reward ratio isn’t favorable to trade this as an inside bar setup.
Although the inside bar setup may not be favorable, a daily close below support at 171.75 may provide us with a short opportunity.
Summary: Wait for a daily close below 171.75 and then look for a short entry on a retest of 171.75 as new resistance.
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