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Posts Tagged ‘aud’

audjpy.jpg The hunt for a reversal candle came up empty. Rather, the AUD/JPY broke out to the topside. Wow! Technically this is a power move. But I’m leery of it because of my bearish posture toward global economic fundamentals.

 

 

 

euraud2.jpg The breakout also happens on the EUR/AUD and that looks cool too, but yikes, trading bearish on the strong euro?

There must be something that’s as so scary as taking on the euro …

 

 

 

audusd.jpg Who do we (as FX traders) loooove to beat up? Who’s the little kid with freckles that gets its lunch money taken week in week out? The dollar!!

But yuck check this chart out. I haven’t been following the AUD/USD lately and decided not to try and find a “pattern” or support and resistance – if nothing jumps out at me (like it didn’t) then that tells me something …

Well if you had to wrestle something out of me I’d say the AUD/JPY is the winner, but I’m not too enthusiastic about it …

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candle.jpg Candle hunting sounds like some sort of freaky hobby, when really we’re talking about looking for candle patterns.

The AUD/JPY has had a couple in recent bearish bounces.

First off, to be clear, the trend is down and that’s the mood we want to be in here (… not down, but bearish) Name of the game is to find a bearish signal.

Candles are NOT the entry signals. They do not supersede the studies and are not stronger, technically, than either the studies or support and resistance.

Candles are meant to be little helper bees, confirming other stuff. If you get a signal, it is more powerful accompanied bya candle pattern.

audjpy.jpg Case in point, if using the MACD and Stochastics, they both rounded lower heading for red arrows as the price bounced down from resistance recently. There’s an entry signal. They were accompanied by a beautiful evening star (first green oval on the price) and by a so-so harami (second price oval). I put ovals on the studies showing the entry signals that occurred with them.

audjpysignals.jpgHopefully we will see some another candle pattern with a bounce down in the next day or two. The candle pattern that just happened today? A hammer.

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euraud.jpg Anyone remember how we had looked at some recurring patterns on the CAD/JPY, a few weeks ago? The EUR/AUD is doing it too. Let’s see if we get a repeat performance  – although the CAD/JPY got the smack-down today and that run is over. Unsurprisingly the EUR/AUD’s major tops and bottoms align in the same time period as the CAD/JPY’s, but interestingly the commodities (AUD and CAD) are heading opposite directions. Let’s see if the pair bounces back from today’s fall, after it broke out yesterday.

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    Remember how we looked at this pair’s double top? (which portends a downward movement)  I chickened out on the thing and never liked the set-up. Well, it completed it’s double top target yesterday (!@#$%& it anyway, it’s made a few hundred pips since we’ve been talking about it). It goes to show that despite bullish divergences, being oversold, and 200 day moving averages, price will do what it wants and true blue trend-followers often get their way. That doesn’t mean I dump how I see things though and change my own trade methods …

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Last seen this pair was busting down from a double top. I think it makes a fine example of how price patterns aren’t magical and, like everything else, should be taken with a grain of salt.

    Granted, when you see one it is a little exciting, in a sense.  But price patterns work out maybe 60% of the time. That means we need to be careful and scrutinize them, doesn’t it? I don’t want to be in the 40% camp.

    The tough thing with this one was the 200 day moving average (MA) was right below the area where you’d feel like it broke out. So when you think of getting in, you’ve suddenly got possible support staring at you. The pair got beyond the MA now, but my beef with the set-up is the fact that the oscillators haven’t reset. Ideally, when the pair was hesitating at the 200 MA it would have coiled there a while, allowing the oscillators to not be so darned oversold. They also are forming a bullish divergence.

    For me, this is too much, on a trade that would already be half thru it’s move so you’d be getting in on late anyway.

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The pair definitively jabbed thru its double top support a few days ago. Yes its a double top, be ye not fooled by its hunchbackedness. The question is whether to get in short now (if you didn’t already).

It feels like it’s gone a bit far for a retest of old support, but then, it does make long moves without pausing. I think it may try. That means I would be inclined to wait to get in until it’s caught its breath and get in as it bounces lower.  I’m leery about it continuing down at present because 1) it’s super oversold on the studies 2) it’s at the 200 day MA (light, thick red line where the price is now).

Don’t go running off and using the 200 day MA on everything if you already have a system you’re trying, remember these are examples of how to trade and use things. The 200 day is watched by lots of folks. It’s technically significant and is almost always a big support/resistance. So let’s watch and see if the price rebounds up now, bounces down and a breach in the 200 MA with less oversoldness comes along. Still plenty of room to run downward (to at least the red oval) – the aussie was not helped by a lower high on GLD a couple days ago.

audnzd.jpg

 

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    In an effort to help you prep for the week ahead, here’s a quick glance at who did best – and worst – for the week. It’s a good idea to stay on top of this so that you know which currencies to avoid and which to look for opportunities in.

    Notes that these are all compared to the euro. Therefore, the top line was the worst performer, down the the bottom line being the best.

    To see the full-view, please click the chart.

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