FX.co ★ torp.paris | AUD/USD

Sell on Rally After Support Breakdown

On the AUD/USD timeframe H1 chart, the current price structure shows a fairly clear bearish pressure. The last price was around 0,7037 after a sharp decline from the 0,7110–0,7120 area. The decline also caused the price to break through the previous support area and move well below the red moving average line. This condition indicates that short-term momentum is still dominated by sellers. The red moving average line appears to be starting to slope downward, while the blue line above the price also has a bearish tilt. That combination can be used as additional confirmation that the main trend on the H1 chart is weakening. The Bollinger Band also widened during the sharp decline, indicating increased volatility. After the price touched the lower area of the Bollinger Band, a small consolidation can be seen around 0,7035–0,7045. This condition should be noted because it can be a rest phase before the next movement. The strategy that can be used is sell on rally, meaning not chasing the price while candles are falling, but waiting for a pullback toward the nearest resistance. The 0,7045–0,7055 area can be observed as a potential zone if the price retraces. If a bearish rejection candle or a bearish reversal pattern appears in that area, a sell position can be considered. An aggressive alternative is to wait for a valid breakdown below 0,7030, then look for entry opportunities after a retest of that level as resistance. For targets, the 0,7020 area can be set as an initial target, then 0,7000 as the next target if selling pressure continues. However, targets should be adjusted according to volatility and risk management. Stop-loss can be placed above the resistance or the last swing high so the risk is not too large if the bearish scenario fails. The bearish scenario should be canceled or reevaluated if the price manages to break back above and hold above the 0,7055–0,7060 area. If the price then moves toward 0,7070 or higher, short-term bearish pressure begins to lose strength and sell strategies need to be more selective. In conclusion, the chart is currently better read as a downtrend with consolidation after a sharp decline. The main focus is to wait for a pullback and bearish confirmation rather than opening positions hastily. Use limited risk per trade, because after extreme moves the price can experience a sharp rebound without warning. This analysis is technical based on the chart and is not a guarantee of trading results.