Reversal Trading Pattern on the AUD/USD
Reversal trading patterns on AUD/USD offer high-probability setups. This commodity-linked pair is volatile. Sharp trends create exhaustion points. Traders spot reversals early for counter-trend entries.
The currency matrix looks at the relative strength and weakness of 28 pairs and ranks them accordingly. The values assigned to each pair can also help to determine the strength in the flows in the time frame under consideration. In this video, it was the Aussie dollar which was of interest following the RBA statement and how this had impacted the aud/usd and a potential reversal on the 10-minute chart.
Common Reversal Patterns in AUD/USD
Look for classic patterns at extremes. Double bottoms or tops show indecision. Head and shoulders mark distribution. Bullish or bearish engulfing candles signal shifts. Pin bars at support/resistance reject levels. Volume price analysis (VPA) confirms these—high volume on reversal candles shows conviction.
VPA Confirmation for Reversals
VPA reveals true intent. Price new low on low volume hints at buying. High volume bounce confirms reversal. Divergence—price extreme on falling volume—warns of exhaustion. Quantum indicators on MT5 or NinjaTrader highlight this. Accumulation/Distribution spots building phases.
Practical AUD/USD Reversal Example
AUD/USD falls on risk-off. Price tests support. Low volume down candles show weak selling. Bullish engulfing forms on high volume—reversal signal. Quantum Trend Monitor flips. Long entry on confirmation.
Reversals reward patience. Wait for VPA alignment. Avoid low-volume traps. Anna Coulling’s VPA approach with Quantum tools turns patterns into disciplined trades.
Master reversal patterns on AUD/USD. Quantum indicators make spotting them reliable. Combine with volume for confident counter-trend entries.
VPA Divergence Examples: Spotting Hidden Weakness or Strength
Divergence in Volume Price Analysis (VPA) is a powerful signal. It occurs when price makes new highs or lows, but volume (or momentum) fails to confirm. This reveals hidden weakness in uptrends or strength in downtrends. Professionals often distribute or accumulate here. Traders use it for high-probability reversals.
Bearish Divergence Example (Uptrend Weakness)
Price rallies to new highs. Candles widen. But volume falls or stays flat. This shows less conviction—buyers exhausted. Professionals sell into strength.
Real Setup: GBP/USD surges on news. New high formed. But volume lower than previous peak. Next candle closes weak on high volume—distribution. Short entry on break lower.
Quantum Trend Monitor warns of fading momentum. Accumulation/Distribution turns negative.
Result: Reversal lower. Lesson: High price on low volume = trap for buyers.
Bullish Divergence Example (Downtrend Weakness)
Price falls to new lows. But volume decreases. This signals selling drying up. Buyers absorb supply quietly.
Real Setup: AUD/USD declines on commodity weakness. New low hit. Volume much lower than prior drop. Bullish candle forms on high volume—stopping action.
Quantum VPOC holds as support. Trend Monitor flips green.
Result: Reversal higher. Lesson: Low volume at lows = potential accumulation.
Hidden Divergence (Trend Continuation)
Less common but strong. Price higher low, volume lower low (bullish hidden)—uptrend continues. Or price lower high, volume higher high (bearish hidden)—downtrend persists.
Example: ES Emini uptrend pullback. Price higher low on lower volume—healthy correction. Rally resumes on high volume.
Quantum tools spot these fast on NinjaTrader or MT5.
Divergence rewards patience. Wait for volume confirmation. Anna Coulling’s VPA with Quantum indicators turns these into reliable setups. Practice on historical charts for mastery.
By Anna Coulling
Creator of Volume Price Analysis