Last week didn’t really offer much in terms of swing trading opportunities, but one big performer was the AUDUSD which aggressively rallied higher, which now has got my attention because of a breakout event that occurred which may be the catalyst for a strong reversal.
In the chart above you can see the tanned colored box which I’ve used to highlight the longer term weekly consolidation/ranging conditions. On Friday price punched through the structure level and closed above it.
Whether this is just an overshoot, or an attempted to breakout, not sure – but why I do know is that this is a fake out in the making.
The market is way to extended from the mean value, creating the mean to price gap. What it boils down to is the market is trying to breakout through a major level while at an exhaustion point. When ever there is major mean gap, price generally has a strong nature to want to fill the gap, in sometimes a violent correction.
Therefore I am expecting a bearish move here, watching for any bearish reversion signals to get me in short in anticipation of this move.
Lets see how it this one plays out 🙂