The thing is, we now have a decision to make! First of all, let’s take a look at a zoomed out view of the EUR/AUD daily chart:
EUR/AUD Daily 1:
As you can see, I’ve marked previous higher time frame, swing high resistance that has held… for now.
This is where your trading discretion comes in and you have a question to answer. Does the fact that this resistance level has held, trump the fact that for the entire year of 2017, EUR/AUD has been on a bullish tear? Do you put your weight in the trend, or in the higher time frame level? In an ideal trading setup, both of these would line up, but not here.
So let’s now zoom in and take a look at what price is doing now that the swing high resistance level has held:
EUR/AUD Daily 2:
Yes it’s held, but only to the most recent price stall. If this previous short term resistance level can hold as support, it’s an excellent level to look to buy the pair off and manage your risk around.
For me at the moment, momentum and the trend wins out over the previous swing high resistance level holding. It’s a buy until it’s not.
