Today I am especially interested in discussing the AUDUSD, NZDUSD and AUDCAD. I think that there could be interesting opportunity and a potential setup very soon, so I wanted to share that with you.
Before we dive into this material, I did want to mention that all of our trading room setups from yesterday saw awesome break outs in later part of the New York session. For example:
1) All of the Yen crosses moved down nicely
2) Just like the EUR & GBP versus the AUD & NZD crosses.
3) Make sure to sign up to our awesome trading room if you have not done so already.
Please take a look at this chart on the 4 hour EURUSD:
1) Massive impulsive move up last Thursday
2) 500 Fib bounce ( lower orange box)
3) -0.272 target hit (higher orange box)
4) Bearish correction off – 0.272 target and resistance trend line (red)
5) Great uptrend channel (green trend lines)
Price is currently moving back towards support levels such as the up trend channel (green) and the major 4 hour and day chart support (purple). Watch out for the 1.33 level as well, it was the previous top. The chance of another bounce upwards is high, at least to the 786 Fib at 1.35.
Who is in the EURUSD long?
Just like the Aussie, the Kiwi is making an impressive sprint down. One of the last time we spoke about the Kiwi was in this article where I recommended a short at 0.8480. The current low is 0.7750 so that just confirms the massive downside on the NZD and the NZDUSD in particular.
Currency the Kiwi is bouncing off a weekly support trend line. And we are building a reversal weekly candle. However, this candle is not even close to finishing so we’ll need to wait to the end of the week for that.
Obviously, a break of that weekly trend line would be a great signal for more downside.
1) In that case the bears have a chance of maintaining control all the way down to the bigger bottom at 0.7370.
2) If that bottom breaks as well, then the Kiwi could keep falling all the way down to the -0.272 target. This target is connected to the 886 Fibonacci bounce (purple boxes).
Any move up should find resistance at the weekly highs (red lines).
The 4 hour chart has already made a good sized retracement to the upside within the up trend… any move down would be a great with the trend trade.
You can see that in the past every move back to the zero line on the AO was a great retracement for more downside. Will the same happen now? We never know…. So before I trade it I want to see:
1) Either a break of the 4 hour support levels (green line)
2) A retrace to the resistance trend lines and a clear bounce off the 1 or 4 hour charts (dark red)
3) A rejection off -0.272 and -0.618 targets (purple)
Preferably I would like to see the 1st scenario play out. That is my number 1 preference. I am not sure if it is going to happen this time around as the move up was quite aggressive which gives me a warning that the upside correction could finally turn out to be bigger.
Also the AUDUSD seems to be moving up aggressively against the prevailing trend. Looks like the Forex market has reached an agreement that it is time to correct the AUDUSD higher.
We are currently breaking out of the great down trend channel (dark red line), after having already broken out of a falling wedge (red line). Currently we are also pushing above a 4 hour resistance level.
The move up certainly does look powerful so it seems that the currency is finally setting up for a bigger correction… but how far and how high? What do you think??
For me, any move up will in my opinion encounter resistance at the targets (purple).
One o f the traders, Julian, from our trading room sent a similar chart via twitter. And I thought it was a great chart so I wanted to share it with you.
Thanks buddy for the great heads-up. Let us see if this top indeed gives support, just like the 500 Fib.
I also wanted to share this AUDCAD 1 hour chart. I was waiting for the break to the downside… but we are currently getting a big upside on the AUDUSD. Doesn’t look like we will get a break. But I will still keep an eye on it in the future.
Thank you for your reading and wish you Good Trading!
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Also, thank you so much for sharing this article!!
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