Transcript of Video
Hello everyone, this is today’s video analysis for January 15, 2019. Today we’re taking a look at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis.
Starting here on the daily timeframe, what we want to do is look at some history and determine some of the price action around the current level that we are at right now, which happens to be just a hair underneath the 0.7200-level right around the 0.7185-level. It’s a pink-shaded area. Upper middle part of the chart. Let me just move it around so you can see where I am here.
Right into that area. 0.7185, 0.7200. What’s important? We look back in time. Look at the blue box first. You could see some support there. Bounce back up to the yellow zone. Eventually breaking underneath the pink zone, finding resistance at the same level before going down. So, support and resistance inside the blue box.
Black circle here. Support. Support. Both times bouncing off that same 0.7200-level and going back up. A little bit of a peak underneath it here back down to the orange zone, 0.7160, but eventually turning back higher. Here, the blue circle finding some congestion, support around the same area, the pink zone. Go back a little bit further. Let me just grab that blue circle and pull it back with this.
The blue circle again here, finding some support into that pink-shaded area. Here finding some congestion and support and resistance around there. And then the black circle on the left. Some support. So, historically, we know that this pink zone has been an area of significant trading decisions by the market. Trading decisions are entering buys or entering sells. Buyers infused into the market. Sellers infused into the market. And it’s happened quite a lot in the past several months.
We’re going all the way back to August of last year. Several times on either side of this. Really if you want to look at this in a different way, if we just kind of take this blue box and expand it out like this, since August of last year, this range-bound market if you will inside that large blue box. We could see that pink zone, 0.7200, is right smack in the middle of that range. So, a very interesting way of looking at it, but we know that with some confidence now that the pink-shaded area is a significant decision point. Above it, may go higher. Below it, may go lower.
We couple that now with the 100-period simple moving average. 100-period simple moving average. The green, wavy line coming into the chart. And we could see today sitting right on top of that, which offers us a clue to support. If the market can stay above that moving average, we may see the continuation higher for the AUDUSD. Back underneath it, of course would lend a clue that it’s going to go back lower again for the AUDUSD.
Some Fibonacci. Just taking it from the last high. We spoke about this yesterday in the Trade Room. It goes all the way down to the bottom of the flash crash that we saw a week and a half ago or so, where the market made the push all the way down here into the 0.6700s and then suddenly returned back higher again. It’s been going up ever since. But Fibonacci down to that level at least puts the .786 fib at the yellow zone just above the current market. .618 underneath the orange zone.
Whether or not you could trust that fib with that low spike there, that’s the question of the week really. Can you trust that? Without that though, I think it’s pretty easy to see the 0.7200, 0.7185, pink zone, and the 100-period simple moving average. Let’s zoom it in a couple of times. You could see the past couple of days sitting on top of that moving average and the pink-shaded area. It’ll be easier to see when we get down to the four-hour timeframe.
And you could see the market sitting on top of that pink zone. Let’s zoom it in a little bit more. There we go. You could see the market sitting on top of that pink zone. 0.7185 being the bottom. Some historical price action and resistance. Not too far back into the past, right here, where this black circle is, you could see the resistance into that same area. And now of course we’re identifying as support.
So, one of two things is going to happen here. It’s either going to break underneath it and continue to go lower, or it’s going to reverse and go higher. We’re watching some of the clues on the USD, which is rallying today. USD going up, which is lending a push for this to go back down. So, the question is: will the USD continue to rise? Will this eventually break underneath the pink zone and go lower, or will we suddenly see the USD fall again and we look for reversal and for this to go back higher again?
So, these are the two things that we’re watching for today. Either it finds support, continues to find support at 0.7185, reverses and starts working its way back higher, or breaking under 0.7185 continues the slide for the AUDUSD today.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.