123 Reversal Setup Aussie (AUDUSD) 160916

How to trade this plan

1. Daily broke the trend line earlier this week. Bears are aware of this and will look to sell in the pink zone on the daily chart
2. The target for the month was S1 – have failed to break below all week
3. 123 reversal setting up on H4 with H4 A and H4 B identified as areas where I would look for an opportunity to buy
4. The H4 stochastic is not great though I am liking the daily. I would prefer to buy low and may wait for the next oversold H4 cycle though if price hits support and lower time frame charts show confirmation of the market going up then I am going to take the shot
5. I have marked out the support zones on H1. Again I would prefer the next H1 oversold cycle though if price hits support and M15, M5 and M1 show indication of upward movement – a higher high or a reversal pattern – then I will consider taking the shot

Note:
a. Please read Kate’s post on Forex Major Currencies Outlook everyday so you are up to date with the latest news. You can follow Kate here
b. Please be aware of risk events for the day by using the Forex.Today calendar
c. Watch Wayne’s webinar daily at 13:30 SAST or catch the recording on the Forex.Today Youtube Channel

AUDUSD Daily

AUDUSD H4

AUDUSD H1

2 thoughts on “123 Reversal Setup Aussie (AUDUSD) 160916”

  1. Morning Ryan, wouldn’t it be too early to buy eaither on H4 A/H4 B since 55 will still be above the 21 EMA whch indicates a down trend

    1. nope – a 123 is a reversal pattern – that’s why the plan suggested trading the confirmation of the pattern and hence price went up

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