EURAUD H4 – Resistance trading +118Pips
Earlier I noticed that short-term resistance in EURAUD has formed strong obstacle for higher prices. The price has noticed this resistance several times. Retail traders will set their sell-limit or market orders as soon as the price comes closer to the resistance level. If professionals want higher prices they will have to absorb this selling. Therefore volume will be high. Volume Spread Analysis can help us to understand whether the resistance will be broken this time (in Analytical Trader it is red bars, presence of strong signals before a move takes place and absence of weak signals).
In the above chart the price once again approached the resistance, but several weak signals suggest that there will be no rally. Therefore I found here the following setup for a short trade:
- Background is weak.
- Several weak signals (two supply signals and minor supply) near the resistance level
- Dynamic trend turned from green to red
- Entry when the price still didn’t move too far
- Exit after strong signal (minor demand)
Total +118 Pips