Ransquawk

EURAUD has been in an upward trend for the last 3 months, reaching a maximum of 1.6190 yesterday. Yesterday’s daily bearish candle engulfed Tuesday’s creating the so-called Bearish Engulfing- Bearish Outside Bar. This is definitely a bearish Price Action formation that heralds declines.

EURAUD D1 – bearish engulfing

An additional confirmation for such a scenario may be the situation shown in H4 chart. We see that the pair quotes indicate divergence in relation to the indications on the MACD oscillator. According to the PA + MACD strategy described here, the Outside Bar formation and divergence on the MACD point to further declines at least to the (blue) zone at 1.5980.

EURAUD – divergence between price and MACD heralds declines in case of breaking out from Outside Bar

Leave us a comment!

Ransquawk
SHARE
Previous articleWhat’s another Ten Billion?
Next articleAnalysis for Newbies: Silver – a Rerun from Last Year?
Since 2010, he has been actively involved in the Forex market up to now. He is a supporter of Price Action and using as few indicators as possible. He believes that the simplicity of the system and consistency in its application is the best way to success in financial markets, and lack of patience is the most frequent cause of failure. Interested in classical systems based on Technical Analysis and in psychology - mechanisms that guide human behavior and conditioning decision making in trading.