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Technical Patterns & Option Strategies: Taking Advantage of the Upside Breakout on the AUD/USD
The Upside Breakout of Resistance
The term “Polarity Change” refers to the process through which a former resistance level becomes a support level, and vice versa. The longer a resistance (support) level has held the market, the more meaningful that level becomes. A significant resistance (support) level is likely to provide a support (resistance) to the pullback rally after a breakout (breakdown). This retest of the new support (resistance) is a strong confirmation signal for a new bullish (bearish) trend and a point for taking fresh long (short) positions.
Read this article for further insight into the long risk reversal strategy in the face of bullish changes in FX – charted examples included.
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