The
dominant trend (or Directional Bias as I call it) is still bullish in the
AUD/USD which in turn makes today’s move lower a correction. In fact it was the
correction lower to 1.0639 on Friday that triggered an aggressive swing buy at
the 20 period SMA on the daily chart. Here are two views - one bullish and one
bearish - on this pair.
Depending on your outlook - short-term or long-term, bullish or
bearish - there’s a little something for everyone today in the AUD/USD.
Breaking down each trade individually means that there are some
bigger picture views to respect, namely the intact uptrend on the pair. The
daily uptrend means that a short would be counter-trend. Trading counter-trend - for me - is strictly limited to shorter-term
time frames like the five, 15, and 30-minute charts. So the trend reversal
which is a Wave Reversal as well on the 15-minute chart is shorting
opportunity.
Past
performance is not indicative of future results
The combination of the 34 period EMA
low being broken with a -100 reading on the 20 period CCI triggered a Wave
Reversal. This is an intraday, counter-trend entry.
The pullback from Friday’s RISK OFF trade corrected the daily’s uptrend. It’s important
to define any move in a trend as a correction or a reversal…it can’t be both.
The move lower in this situation correction the overall uptrend and therefore presented
a potential opportunity to buy into the weakness which should only be done in
an overall uptrend. The swing buy zone between the 20 period SMA close and the
34 period EMA high was the cushion of support that validated the entry long.
Past
performance is not indicative of future results
The daily chart is still in a “twelve
to two o’clock” uptrend which means the dominant psyshcology of the pair - which
should not be confused with the short-term or current psychology - is BULLISH.
The one thing to keep an eye on is the overhead resistance between 1.0821 to
1.0843 where the pair is getting “toppy”.
As an active forex trader and Chief
Currency Analyst for InterbankFX.com I do write for a number of sites all over
the web and I am happy to say that I will be posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it
out for reading later.
Forex
trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for Interbank FX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
The dominant trend (or Directional Bias as I call it) is still bullish in the AUD/USD which in turn makes today’s move lower a correction. In fact it was the correction lower to 1.0639 on Friday that triggered an aggressive swing buy at the 20 period SMA on the daily chart. Here are two views - one bullish and one bearish - on this pair.
Depending on your outlook - short-term or long-term, bullish or bearish - there’s a little something for everyone today in the AUD/USD.
Breaking down each trade individually means that there are some bigger picture views to respect, namely the intact uptrend on the pair. The daily uptrend means that a short would be counter-trend. Trading counter-trend - for me - is strictly limited to shorter-term time frames like the five, 15, and 30-minute charts. So the trend reversal which is a Wave Reversal as well on the 15-minute chart is shorting opportunity.
Past performance is not indicative of future results
The combination of the 34 period EMA low being broken with a -100 reading on the 20 period CCI triggered a Wave Reversal. This is an intraday, counter-trend entry.
The pullback from Friday’s RISK OFF trade corrected the daily’s uptrend. It’s important to define any move in a trend as a correction or a reversal…it can’t be both. The move lower in this situation correction the overall uptrend and therefore presented a potential opportunity to buy into the weakness which should only be done in an overall uptrend. The swing buy zone between the 20 period SMA close and the 34 period EMA high was the cushion of support that validated the entry long.
Past performance is not indicative of future results
The daily chart is still in a “twelve to two o’clock” uptrend which means the dominant psyshcology of the pair - which should not be confused with the short-term or current psychology - is BULLISH. The one thing to keep an eye on is the overhead resistance between 1.0821 to 1.0843 where the pair is getting “toppy”.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner