AUDUSD Sell Potential

2023年5月8日

Here is the framework surrounding this idea:
Weekly:
-we remain bearish.
-we opened a new cycle of the market at the end of Jan'23 with a rejection off the supply levels as well as a grab of liquidity off the highs.
-we pushed and have retraced to the 38.2% fib level on the weekly.
-previous momentum prior to the current price consolidation indicates bearish strength was quite palpable- I hold the view that we shall be keen to carry this momentum south

Daily:
-we are bearish, despite the current up-and-down price action we have seen in the recent weeks
-the daily has printed a clear H&S pattern/the possibility that a head and shoulder shall be forged on the time frame.

H4:
-we are currently on a previous zone of supply printed on 14th April.
-orders were picked here, then dumped south to break structure.
-this left the April high at 0.68062.

Today, 08.05:
-the market woke up bullish, carrying the momentum of the Friday and weekly close (which printed a high at 0.67570)
-we have picked out two major weekly highs, starting with the Friday high and an old high at 0.67718.
-we are 2-5 pips away from grabbing the April high, and it seems imminent with the market having been on a stop-hunting mood for the day. This would seal the ultimate liquidity hunt for the start of the May session.

This trade is based on the premise that:
1) the April high was the prime target of today's bullish rally.
2) while we printed a strong weekly candle, we are YET to leave the consolidation zone which has been between 0.68000 and 0.61000, generally speaking. As such, we are subject to consolidating behavior on
the pair. Consolidations are usually littered with liquidity hunts (in my experience) because this is the zone within which firms load up on liquidity before pushing the pair either bullish or bearish past the consolidation
parameters (think of it as loading up fuel before a strong rally or strong tank to the lows)
3) we are generally at the key institutional level at 0.68000, which is bound to have institutional orders to dump price south.

-Once we pick out the April high AND offer a valid and strong rejection in favor of the downside, I shall view this as a trigger to enter a sell.
-my preferred sell entry level is the key daily level at 0.68145.
-the next level of interest (liquidity) is the Friday low, which sits pretty at 0.66889.
-my target for the trade shall be 0.66850, taking out the Friday low.

NOTE: this is not to be construed as financial advice. It is my humble opinion on the direction of the pair in the near-term. If possible, rely upon your own analysis to chart the way forward. Happy trading!