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  • AUD/CAD has fallen below critical daily support that is now expected to act as resistance.
  • The move has given rise to a high-probability trade setup to the downside. 

In the following top-down analysis, starting with the weekly, the daily and then moving down to the 4-hour chart, a swing trade high-probability setup has been illustrated.

Bears can take advantage of the break below daily support and seek a discount on a pullback to the resistance structure for a 1:3 risk to reward ratio selling AUD/CAD.

Weekly 1,2,3 wave analysis

As can be seen, the price has moved in a wave sequence, the third being in mid-flow from which bears can seek to get on board. 

Daily 1,2,3 wave analysis

The daily chart shows that the price has slipped below the old support structure, prior lows, and on a restest pf the area, fortified by the trendline resistance, bears can seek to enter the third wave at a discount to current spot. 

4-hour sell limit

On the 4-hour time frame, the structure is clear and a sell limit order can be placed with a stop loss protecting the position against any adverse sharp movements beyond the previous resistance. 

A target towards the prior weekly structure offers a 1:3 risk to reward opportunity.