On the weekly chart, AUDUSD now seems to be in a broadening formation. I consider these deadly after an uptrend and believe the pair topped at .9408. So, if it’s not going to go up it has to go down, right? Well, yes, but this pair has been strongly bullish and I wouldn’t expect it to just roll over and fall, precipitously. As I’ve said many times, topping and bottoming are events that play themselves out over days, weeks, and sometimes months. Caution is in order as it always must be when trading.
I’ve circled a potential double top on the weekly chart. It’s only potential because price hasn’t broken below the trough of .8945. I prefer to see double tops separated by one or more candles but this isn’t a requirement. Should it break that trough, and also break below the ascending line of the broadening pattern, it could result in a nice move down.
My short from .9152 doesn’t show on this chart because I use a different charting package for longer-term charts than is available in my broker’s platform. However, it’s really taking its time in dropping. Once again, watching the shorter-term charts makes sense. Here’s the weekly:
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My purpose in writing this blog is to show you how one trader, me, makes trading decisions and survives while trading Forex. One of the biggest problems I had when I first started trading was trying to apply the “rules” to actual trades. Another was the psychology—limiting losses and letting profits run. If you study my blog you’ll see how I deal with both those issues. So my writings are not trade recommendations but rather educational in purpose. You have to decide on your own approach to trading. Remember that trading is risky.