AUD/USD Long SetupAUD/USD Long Opportunity
4h:
I have decided to take this trade if given the opportunity because it coordinates with my preset R:R .
We are currently (12/24/18) at a major support level (.7038) tested last & respected since Oct 5th, 2018. We did close below on the daily this only to retest and reject from top of daily (green) demand zone @ .7072.
Also, we are currently following a steep bearish trend line so far well respected, with the 14 EMA acting as dynamic resistance to help confirm we are still bearish.
I believe we will continue bearish in an attempt for the market to retest the .70000 psychological level and possibly retest an old trendline as support starting from .80000 psychological level, which was shown to act as a resistance for the market's bearish trend (shown on daily) since Jan. 30th 2018. This level falls at a confluence with the steep bearish trendline @ .6972. I believe IF the market comes to retest that level it will be a bull trap/wick fill. My stopless is set at .6967 which is 5 pips below confluence in case it goes south.
The possibility of the market (in my eyes) blowing past the .70000 major psychological level without rejections straight to the confluence of trendlines @ .6972 is unlikely. I will set an alert for tradingview to notify me around .70000 psychological level, and enter a long position (with lot size determined based on 10% risk rule applied to # of pips for stop loss), either on the first test/rejection wick or wait for a double bottom after the initial rejection for additional confirmation.
TP is set at .7196 right below the next daily supply zone/minor psychological level of .7200.
This trade has a 6.31 Risk:Reward ratio, with a 31 pip stop loss and a 198 pip take profit.
Please apply your own throughts/analysis to mine and don't forget to share your thoughts and follow for more analysis
Aaron Leibowitz
Free World Trading
