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AUD/USD. Time frame H4-W1. 11.09.2016 – the pair consolidated before moving lower

Published 11.09.2016 at 08.52 PM.

Late in the week, enthusiasm of the risky assets buyers turned into major disappointment. Commodity currencies and the equity market experienced hard times. The mood swing was provoked by the comments of Boston Fed President Eric Rosengren who hinted that the rate could be hiked soon. Besides, there were some other fundamental factors:

  • North Korea conducted a nuclear test successfully on Friday.
  • The regulations of the US banks were tightened. Now, the American banks must increase their capital in order to cover all risky assets.

As a result, demand for the US dollar increased, and rebound formations appeared on the major’s charts.

So I advise you not to go against the tide and buy the USD. As an example, let’s see at the AUD/USD movement.

The chart clearly shows buyers’ strong activity which helped to hold the sell zone within figure 77:

  • W1 - the Shooting Star candlestick pattern is formed
  • D1 – the reversal Shooting Star candlestick pattern is formed and confirmed

That’s why, the traders working on the medium time frames can sell the aussie as soon as the market opens with the stop beyond the sell zone (0.7800).

However, this approach doesn’t suit me, as the setups turn to be enormous stops. I prefer more accurate entries which we are going to find on the H1-H4 time frames. The picture below shows the key zones and the plotted outlook for a further movement.

So I’m waiting for a southward break to the support at 0.7490, and in case of an unfavorable scenario for bulls, to the 0.7410-0.7450 sell zone. It is recommended to open sell orders after correction of 38.2% - 50% from the latest bearish wave.

The trading direction for the next week is determined. Now, the only thing we should do is to be patient and wait for the setups formation to buy the major pairs with the USD. {#bablo}

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