AUDCAD Technical Analysis
Popular AUD/CAD Pattern That May Not Work This Time
Talking Points:
- Weak Uptrend on AUD/CAD Daily Chart
- Trading Against a Head-and-Shoulders Pattern
- Key Support Zone for Buying AUD/CAD
Head-and-shoulders patterns tend to generate a lot of excitement among traders. However, there are a few factors that can cause these popular patterns to fail, especially if they are entered too quickly. AUDCAD is currently exhibiting one potential example of this situation.
As shown below, the rising wedge pattern on the AUDCAD daily chart signals a rather weak uptrend in the bigger picture, but it has not yet shown any of the usual wedge pattern breakdown signals. The most telling signal would be a quick move beyond the upper wedge resistance before breaking back in again swiftly. Since it has done no such thing, this pattern can be traded using traditional support and resistance principles instead.
Guest Commentary: Rising Wedge Pattern on AUD/CAD Daily Chart
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The head-and-shoulders pattern on the below AUDCAD four-hour chart will become obvious once the neckline denoted by the black horizontal line has been drawn. However, less-experienced traders might easily miss the fact that this pattern will have to punch through at least three levels of rising support in order to achieve its goal. In addition, this goes against the dominant trend on the daily chart.
Guest Commentary: Head-and-Shoulders Pattern in AUD/CAD
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This is not impossible, of course. However, a far more likely short-term development would be a bounce off one of these rising lines of support, which is why today's trade is to the long side.
The hourly chart below clearly provides a reasonable support zone for initiating new longs. The exact zone comes in at 0.9849-0.9882.
Guest Commentary: Key Support Zone for Buying AUD/CAD
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This risk zone is a mere 33 pips deep, as compared to the 60-100 pips that even a conservative move to retest the recent highs would supply.
Nonetheless, in order to achieve greater precision with this trade entry, the 15-minute time frame (chart not shown) is preferred. Viable triggers would include the usual suspects, including bullish reversal divergence, pin bars, and/or bullish engulfing patterns on the 15-minute chart.
Dropping down to the lower time frame should provide even narrower risk, however, traders should be willing to take two or three tries to get in on this move. Although this is essentially an intraday trade, part of the position can be scaled out and the remainder left to ride what could be a worthwhile move amid acceptable risk.
By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com
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2 Attachment(s)
Forex: AUD/USD Technical Analysis
Talking Points:
- AUD/USD Technical Strategy: Flat
- Support: 0.9177 (38.2% Fib exp.), 0.9132 (Mar 7 high)
- Resistance: 0.9233 (50% Fib exp.), 0.9290 (61.8% Fib exp.)
The Australian Dollar continued to push higher against its US counterpart for a fourth consecutive day, taking out resistance at 0.9177 marked by the 38.2% Fibonacci expansion. The bulls are now testing the 50% level at 0.9233, with a break above that eyeing the 61.8% Fib at 0.9290. Alternatively, a reversal back below 0.9177 aims for the March 7 highat 0.9132.
Prices are too close to relevant resistance to justify a long position from a risk/reward perspective. On the other hand, entering a short trade looks premature absent a new bearish reversal signal. We will continue to stand aside for now, waiting for a more attractive setup to present itself.
Attachment 6267
Attachment 6268
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Australian Dollar Nears Make-or-Break Levels; Watch Key Data Tonight
- Turning point near as AUDUSD tests technical resistance ahead of key Aussie employment data
- Currency pair currently outpacing key fundamental driver in yield spreads
- Extremely one-sided forex crowd positions underline reversal risk
http://youtu.be/xdVL023YQmY
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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AUD/USD Technical Analysis
Talking Points:
- AUD/USD Technical Strategy: Flat
- Support: 0.9363 (38.2% Fib exp.), 0.9303 (23.6% Fib exp.)
- Resistance: 0.9412 (50% Fib exp.), 0.9461 (61.8% Fib exp.)
The Australian Dollar continued to advance for a third consecutive day against its US namesake hitting the highest level in five months. Buyers are now testing the 50% Fibonacci expansion at 0.9412, with a break above that on a daily closing basis exposing for the 61.8% level at 0.9461. Alternatively, a reversal below the 38.2% Fib at 0.9363 targets the 23.6% expansion at 0.9303.
The available range between near-term support and resistance is too narrow to make for an attractive trade setup for a strategy using a stop-loss activated on a daily closing basis (as is the case for our approach) given a 20-day ATR reading of 70. We will remain on the flat for now.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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AUDJPY Technical Analysis
An AUD/JPY Breakout Signal That’s Not as Good as It Seems
Talking Points:
- Misleading Pin Bar on AUD/JPY Daily Chart
- 2 Resistance Zones Clearly in Play Now
- Where and When to Consider AUD/JPY Shorts
One of the more popular strategies for end-of-day trading involves the pin bar, which many use to great effect. However, today's intraday trade actually highlights a pin bar breakout on the AUDJPY daily chart that may not work out as well as longer-term traders may hope.
As shown below, the pin bar high has just been broken on the daily chart, and price appears to be happily on its way. However, there are two clear horizontal ranges in play on this time frame, and price is about to retest a roof. It may or may not break to the topside from here, but intraday traders could take their chances with countertrend trades here nonetheless.
Guest Commentary: 2 Daily Ranges in Play for AUD/JPY
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If price reacts—and recent candles have reacted to this level many times—then there is at least potential for a scalp here, one that could turn into a longer-term trade if price heads lower. There are 70 pips to be had even to reach the rising trend line below, and if it breaks, it would signify a shift in the somewhat dubious-looking uptrend comprised of many overlapping swings.
The lower portion of the resistance zone on the four-hour chart (see below) is obvious, as it is simply the level that has recently held as resistance.
Guest Commentary: Key Resistance Zone for Selling AUD/JPY
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To provide some room for error, a value approximately one-third of the current horizontal range has been added to the topside, giving an overall resistance zone of 95.18-95.47. This zone is 29 pips deep, which is a little large compared with the (conservative) potential 70-pip move to the trend line.
As a result, the better idea would be to trade this set-up using a trigger from the hourly chart, shown below. There are a lot of overlapping moves here, which suggests that the current upward move is being consistently challenged by sellers and is most likely not a trend move.
Guest Commentary: Ideal Time Frame for Taking This Trade
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With that in mind, once AUDJPY touches resistance, short entries could be made using bearish engulfing patterns, pin bars, and/or bearish reversal divergence on this hourly time frame. As always, however, two or three attempts may be needed in order to successfully hop on to this move.
By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com
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AUD/USD Technical Analysis
Talking Points:
- AUD/USD Technical Strategy: Short at 0.9328
- Support: 0.9201 (23.6% Fib exp.), 0.9041 (38.2% Fib exp.)
- Resistance: 0.9358 (channel floor), 0.9408 (May 14 high)
The Australian Dollar looks vulnerable to deeper losses after prices broke below support at the bottom of a rising channel set from late January. Sellers now aim to challenge the 23.6% Fibonacci expansion at 0.9201, with a daily close below that exposing the 38.2% level at 0.9041. The channel floor, now at 0.9358, has been recast as near-term resistance. A move back above that initially targets the May 14 high at 0.9408.
We will now enter short in line with our fundamental outlook, aiming for 0.9201 as an initial objective. A stop-loss will be activated on a daily close above 0.9408. We will take profit on half of the trade at the first target and trail the stop-loss to the breakeven level.
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--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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AUD/USD Keeps Traders In Suspense As Harami Awaits Confirmation
Talking Points
- AUD/USD Technical Strategy: Pending Long
- Clear candlestick reversal patterns absent on the daily chart
- Harami on the four hour timeframe awaiting confirmation
AUD/USD is awaiting guidance near the 0.9320 mark with candlestick reversal signals lacking on the daily chart. This suggests the pair’s consolidation beneath the 0.9440 level of resistance may be set to continue.
AUD/USD: Awaiting Guidance Near Support At 0.9320
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Examining the four hour timeframe; a Harami pattern suggests the bears may be relinquishing their grip on prices in early European trade. The formation could hint at a push back to 0.9440 if confirmed by a second up-period and break above intraday resistance at 0.9360.
AUD/USD: Harami Suggests Bears Losing Steam
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By David de Ferranti, Currency Analyst, DailyFX
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AUD/USD Range Remains In Play With Bearish Candlesticks Lacking
Talking Points
- AUD/USD Technical Strategy: Longs preferred
- Doji highlights indecision suggesting range may persist
- Harami on the four hour timeframe yielded intraday recovery
AUD/USD continues its consolidation between the 0.9320 and 0.9440 mark with a Doji on the daily suggesting indecision amongst traders. The pair could remain range-bound in the absence of key reversal candlestick patterns.
Range Remains In Play
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Examining the four hour timeframe; a Harami pattern as noted in yesterday’s report yielded an intraay recovery for the Aussie. With the pair holding above the 0.9360 mark a run on 0.9400 may be possible with bearish patterns lacking.
Harami Hinted At Intraday Recovery
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By David de Ferranti, Currency Analyst, DailyFX
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