Good morning traders! Today we detected a trade opportunity in the EUR / AUD pair and we want to share with you in detail how we perform a multi-timeframe analysis to develop a setup.
🔸The first step is to start on a high timeframe chart in order to see the long-term behavior, whether it is in an uptrend, downtrend, or range.
🔸What we see on the daily chart of this pair is that it has been moving within a range for several months without a clear main trend. Of course, inside this range, there are internal trends of less temporality, which is what we will use later to be able to develop the setup.
🔸Talking about the price situation at this time, we see that it is coming out of a support zone that was tested multiple times, and that each time it faced that zone it generated an upward movement. Because of this, we are now expecting the same behavior.
🔸Decreasing the timeframe to 4H, we are preparing to analyze the short-term behavior.
🔸Following the bounce in the support zone, the price broke to the upside the Descending Trendline, this was a strong bullish sign. The problem with this break is that there was a Resistance zone very close, so we needed this zone to be penetrated to the upside before looking for an opportunity.
🔸This is what happened a few days ago. The price generates a bullish breakout, and not only that, but also begins a corrective process in a throwback to the support zone (previous resistance).
🔸Due to all this confluence of factors, we consider this pair to be a good opportunity.
🔸Using the cloning of the first impulse as a movement objective, it offers us an excellent risk-benefit ratio.
🔸The first step is to start on a high timeframe chart in order to see the long-term behavior, whether it is in an uptrend, downtrend, or range.
🔸What we see on the daily chart of this pair is that it has been moving within a range for several months without a clear main trend. Of course, inside this range, there are internal trends of less temporality, which is what we will use later to be able to develop the setup.
🔸Talking about the price situation at this time, we see that it is coming out of a support zone that was tested multiple times, and that each time it faced that zone it generated an upward movement. Because of this, we are now expecting the same behavior.
🔸Decreasing the timeframe to 4H, we are preparing to analyze the short-term behavior.
🔸Following the bounce in the support zone, the price broke to the upside the Descending Trendline, this was a strong bullish sign. The problem with this break is that there was a Resistance zone very close, so we needed this zone to be penetrated to the upside before looking for an opportunity.
🔸This is what happened a few days ago. The price generates a bullish breakout, and not only that, but also begins a corrective process in a throwback to the support zone (previous resistance).
🔸Due to all this confluence of factors, we consider this pair to be a good opportunity.
🔸Using the cloning of the first impulse as a movement objective, it offers us an excellent risk-benefit ratio.