Weekly: -AUDUSD has been in a crunch/ consolidation zone for the last seven (7) weeks. That means that since March, we have pretty much been moving within a certain zone of price. -The previous weekly bias was fairly strong in favor of the bears. There is a higher likelihood, statistically, of us picking up the previous bias/momentum and dumping to the downside than we are to shift direction and head to the upside. -we have no strong level based on the recent weekly price action (going back 5 years) to support the pair and provide a springboard for us to push north. -historically, the zone between 0.71000 and 0.62000 has been void of strong support that has resulted in an upswing on the pair. -based on these aspects, 0.62000 is the most potent level to provide support on the weekly and push us to the upside. Daily: -while the weekly has been in consolidation, the daily has been, overall, creating a Head and shoulder pattern on the larger picture. This is one of the most profitable patterns one can have -this being clear as per the image, we are very likely going to head all the way to 0.62000 in the next few weeks/months. Based on these facts, both the weekly and daily are pointing the pair south and 0.62000 is the best level to target for me.
How to trade this: -we have just broken structure on H4 with some clear bearish strength -once the impulse has been relieved (once we have a retracement), I intend to enter a sell on the pair (preferably around 0.67100) and aim for 0.62000 long term. -I also seek creation of structure below the monthly low at 0.65640 in order for me to engage the market with a clear bias in favor of the downside. This is where I would load up orders to support the sell position.
NOTE: the current market has been in a very erratic state. the level of risk related to taking this hard line of a bias is fairly high, considering the last seven weeks of price action. Use your own analysis to determine which way to lean
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