AUDUSD look for bearish patterns in the POC zone

The AUDUSD surged heavily to the upside straight towards 0.7150-80 as I have analysed on Session Recap webinar, making it definitely the trade of the week. My guess is that RBA is not so happy with recent AUD strength as divergence between commodity prices and currency is not good for AUD.

Currently we can see a huge HIDDEN BEARISH DIVERGENCE which should follow the main 4H trend which is still bearish. The price has made both high and low and its getting within POC zone in the form of a retracement (78.6, historical breakout retest patterns, bearish order blocks). The zone is 0.7220-45. What traders should look for is – bearish reversal patterns. The logic is simple – as long as we have a divergence we need a trigger for it. The trigger is any of Bearish reversal patterns. Have in mind that even if the price proceeds above POC but the bearish pattern shows IN THE ZONE, it will still be a valid trigger. A good pattern would be a shooting star or a dark cloud cover.

If we get a pattern within POC zone, the pair could drop targeting 0.7140 (H3 support) and 0.7070 (50.0, EMA89 confluence). Have in mind that for the bearish pattern trigger to be valid, the hidden bearish divergence should still be visible on the chart.

Follow @TarantulaFX on twitter for latest market updates