EUR/AUD possible false breakout setup on US Election’s Volatility

In the H4 timeframe, EUR/AUD broke down the intermediate support level at 1.6460 followed by continuation to the downside tested the support at 1.6309 with shortening of the thrust, suggested the down momentum is fading. The subsequent rally up confirmed the exhaustion of the momentum.

As the vote counting for US election is still on going, volatility might take the EUR/AUD down to test the support level again at 1.6300, which could present a potential false breakout setup upon confirmation. Watch the video below (timestamp starts 3:28) to find out how you can trade the false breakout with reversal setup after seeking confirmation while profiting from the trapped traders below:

Below are the key parameters for EUR/AUD potential long setup for trading session on 4 Nov 2020. Pay attention to the logic behind the false breakout and why it is easier to profit from different groups of the trapped traders.

Entry: long limit order at 1.6322 (look for confirmation signal for valid entry)

Stop loss: 1.6237

Take profit: 1.6457