For the second time in a week we are taking a short position in the AUDUSD. The wave pattern that we are following is giving an excellent forecast about what is likely to happen. The confirmed bearish sequence mentioned in the first trade is still in place and the first leg down completed in 5 waves. Whenever we get a 5 wave move we expect it to be followed by a similar move after a pullback. A pullback has just completed in 3 waves, a key requirement of pluymmer wave trading and has completed around thearea of the previous wave 4. This would be the smallest size acceptable for the proposed wave B pullback and a large pullback cannot be ruled out.
If this is the end of the pullback we can expect a 5 wave move lower to around 0.71 giving us a 7:1 potential risk reward. If this is not the end of the pullback then we may get stopped out here and will look to sell again at the next opportunity. A good bout of risk aversion would really help this trade, so some trade war hype or an opec crisis would push us to target.
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