Transcript of Video
Hello everyone, this is today’s video analysis for November 5, 2018. Today we’re looking at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis.
Starting here on the daily timeframe, of course we’re looking at a downtrend. The long-term trend line. The black trend line here has been down for quite some time. Going all the way back to the beginning of this year back in January, we have been in a downtrend. Within the downtrend, we’ve seen many periods where the market made rallies, corrections, reversal, higher, and then eventually turning back in the direction of the long-term downtrend.
You could see all those short trend lines within the long-term downtrend line. And in the recent days, we’ve seen something very similar, haven’t we? We’ve seen the market make a rally higher on the AUDUSD.
Let’s go ahead and zoom it in a bit now and we can see what I mean by that. You could see the big blue candle last week as the market rallied higher. USD falling against many pairs late last week, pressuring this back up towards what is that longer-term trend line. Also, the red trend line. Shorter leg of that trend line capping the last two highs. You see the blue circle. Top left-hand corner of the chart. Black circle in the middle. That red trend line coming into play right here into the 0.7200-level, the pink-shaded area that you see here in the middle of the chart.
0.7205, 0.7220 is that pink zone. Also, correlating and converging with these two falling trend lines. Interesting candle on Friday. The smaller body. Long wick on top. The reason I point that out is right there in the black circle. You could see that’s what happened here. We see a small body with a long wick on the top. What that implies is there was this sudden infusion of selling pressure. Suddenly there were sellers jumping into the market.
It could’ve been just profit-taking from that large blue candle at the end of the week last week, but there was this sudden infusion of sellers into the market that came in and drove the market back down. At one point, that was a blue candle. Bullish candle all the way to 0.7255 and then suddenly turned back around as the sellers came back and drove it down. What that implies is there could be some pressure to send this back down in the direction of the long-term trend.
So, we need to be watchful of this pink-shaded area. There’s really two things that we watch for. It’s either going to bounce off and go down, like what happened there at the black circle. It bounced off the underneath side of the yellow zone and went down, or it’s going to break through it. There’s going to be another surge of buyers that’s going to break through 0.7220 and continue to pressure towards the 100-period moving average, the yellow-shaded area. One of those two things is what we’re going to look for today.
I don’t know if we’re going to have enough pressure to break through that pink-shaded area, but we’ll have to wait and see. Take it down to the four-hour timeframe. Now that we see it here, we can clearly see the market got above the pink zone, hit the yellow zone, came back, and now sitting underneath that pink zone as resistance. So, I would say for the day today, as long as it stays under that pink zone, I would be more likely to watch for bearish pressure, maybe targeting back down to the orange zone or even lower if the sellers come back in strongly and send this back down.
The only reason you would suspect buying pressure is coming back in, getting back above the pink-shaded area today for the AUDUSD.
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