Hello, traders! 🚀
A rare and powerful setup is forming on AUD/USD, and all signs are pointing decisively lower. 👇 This isn't just a simple technical pattern; it's a perfect storm of fundamental, technical, and event-driven factors aligning to create a high-conviction short opportunity.
If you're looking for a clean setup with a clear catalyst, this is it. Let's break it down! 🧐
The Core Thesis: Why We're Bearish 🌪️
This trade is built on three powerful pillars that are converging at the same time:
The Trade Plan 🎯
Here are the precise levels for executing this trade idea.
Conclusion: 💡
It's rare for fundamentals, technicals, and a major event catalyst to align so perfectly. The rejection at major resistance, combined with the powerful fundamental driver of policy divergence and the upcoming dual-catalyst on July 9th, makes this a high-conviction setup.
This is my analysis and not financial advice. Always do your own research and manage your risk carefully.
What do you think? Are you bearish on the Aussie too? Let me know your thoughts in the comments below! 👇
And if you found this analysis helpful, please give it a BOOST 🚀 and FOLLOW for more trade ideas! 👍
A rare and powerful setup is forming on AUD/USD, and all signs are pointing decisively lower. 👇 This isn't just a simple technical pattern; it's a perfect storm of fundamental, technical, and event-driven factors aligning to create a high-conviction short opportunity.
If you're looking for a clean setup with a clear catalyst, this is it. Let's break it down! 🧐
The Core Thesis: Why We're Bearish 🌪️
This trade is built on three powerful pillars that are converging at the same time:
- Massive Policy Divergence: 🇺🇸 vs 🇦🇺 This is the engine of the trade.
The Fed (USD): Remains HAWKISH 🦅. They are laser-focused on fighting stubborn inflation and have signaled they are in no rush to cut rates.
The RBA (AUD): Is actively DOVISH 🐨. They've already cut rates and are widely expected to cut again this week to support a weakening economy.
Result: This widening gap in interest rate policy creates a fundamental tailwind that heavily favors a stronger USD and a weaker AUD. 💸 - The Dual-Catalyst Event (July 9th): 🗓️ This is the trigger.
FOMC Minutes Release: The minutes from the Fed's last meeting are expected to confirm their hawkish stance, reinforcing USD strength.
Tariff Deadline: A 90-day suspension of Trump-era tariffs expires on the same day. The base case is that tariffs will be reimposed, sparking a risk-off move in the markets.
Result: Risk-off sentiment is toxic for the risk-sensitive Aussie dollar (AUD) and a magnet for the safe-haven US dollar (USD). This is a potential double-whammy for AUD/USD. 💥 - The Technical Picture is Screaming "Down" 📉
The chart tells a crystal-clear story of rejection and weakness. As you can see on the 4H chart, the price action is incredibly bearish after failing to break out higher.- The Great Wall of Resistance: Bulls threw everything they had at the 0.6590 - 0.6600 resistance zone and were decisively rejected. 🧱 This wasn't just any level; it was an 8-month high and a major long-term resistance area. A failure this strong is a huge red flag for buyers. 🛑
- Momentum has Flipped: We saw classic bearish divergence on the higher timeframes, and as you can see on this 4H chart, we have now decisively broken below the recent rising channel. The path of least resistance has flipped from up to down. 👇
- The Great Wall of Resistance: Bulls threw everything they had at the 0.6590 - 0.6600 resistance zone and were decisively rejected. 🧱 This wasn't just any level; it was an 8-month high and a major long-term resistance area. A failure this strong is a huge red flag for buyers. 🛑
The Trade Plan 🎯
Here are the precise levels for executing this trade idea.
- Asset: AUD/USD
- Direction: Short (Sell) 📉
- Entry Zone: ➡️ Look for a patient entry on a pullback to the 0.6535 - 0.6550 area. This was previous support and is now expected to act as strong resistance. We want to sell into strength.
- Stop Loss: 🛑 A daily close above 0.6610. This level is safely above the recent highs. A break here would invalidate our bearish thesis.
- Target 1 (TP1): ✅0.6475. This is the first logical support level. A good area to take partial profits and move your stop loss to break-even.
- Target 2 (TP2): 🏆0.6400. This is our primary target, representing the bottom of the multi-week trading range and offering an excellent risk-to-reward ratio.
Conclusion: 💡
It's rare for fundamentals, technicals, and a major event catalyst to align so perfectly. The rejection at major resistance, combined with the powerful fundamental driver of policy divergence and the upcoming dual-catalyst on July 9th, makes this a high-conviction setup.
This is my analysis and not financial advice. Always do your own research and manage your risk carefully.
What do you think? Are you bearish on the Aussie too? Let me know your thoughts in the comments below! 👇
And if you found this analysis helpful, please give it a BOOST 🚀 and FOLLOW for more trade ideas! 👍
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.