Watching for Lower Lows

Within the ‘mean reversion trade’, which I think will play out in 2022……

the current game is to firstly watch if markets double dip and test the lows seen in the past fortnight.

And then incorporate that into whether prices make higher highs or lower lows.

The patterns and waves seen in the AUDUSD (weekly) chart below, is being mimicked across a host of assets.

In this example, the bounce from 0.7000 needs to travel above 0.7555 to make a ‘higher high’….while a new ‘lower low’ is close by.

Additionally, the AUDUSD has also been a good proxy for ‘risk-on’ and ‘risk-off’ sentiment.

December 20, 2021

by Rob Zdravevski

rob@karriasset.com.au