Transcript of Video
Hello everyone, this is today’s video analysis for January 24, 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, a little bit difficult to discern a longer-term trend here for this currency pair. If I zoom out a little bit, we can maybe begin to get a better idea of what the long-term trend has been if we look at this long downtrend that’s been happening since going all the way back to the left-hand side of the chart. January of 2018, about a year ago, we have seen overall a more bearish than bullish move.
Even the 100-period moving average here flowing down through the chart from top left to bottom right. But that trend really hasn’t continued to move. Of course a few weeks ago, we had the flash crash pushing it all the way down here into the mid-0.6700s and a rapid return. But since then, we really haven’t seen a solid uptrend, a solid downtrend for a longer-term period of time here for the AUDUSD
Zooming it back in, we could see at least for the past couple of weeks, we’ve had more bearish than bullish here on the AUDUSD. The question of course would be: is this going to be the continuation of the downtrend or is it just a simple pullback from this little rally that we saw right here? After the crash, pushed down and then it rallied back a little bit. So, those are some of the big question that I don’t think have been answered by the market quite yet.
So, what we’re going to do is we’re going to focus on the direction the market has been going in. That’s what we’re going to do. Two weeks or so we’ve seen the market more bearish than bullish. So, if we focus in on that direction, then we’re looking for selling on rallies to resistance or breakdowns through support. Rallies through resistance would have been in the past 24 hours, 48 hours, back here into the orange-shaded area as a resistance to go short. 0.7145, 0.7160, or the next reason we would go short would be it breaks through the blue zone.
It doesn’t mean it’ll do that. It just means that those are two of the things that we would look for if we’re going to sell in the most recent momentum that we see here for the AUDUSD. If we’re going to look for reversal obviously to go back up, these are also the places we’d look for that. Right here at the blue zone we’d look for support and reversal or a break back above the orange zone for a continuation of that reversal.
Let’s go ahead and take it on down to the four-hour timeframe. So, as we could see, the market did clearly find resistance at the orange-shaded area yesterday and worked its way down in an aggressive fashion back down to the blue zone. So, the question is today will we break the blue zone. Will it get through this blue-shaded area and continue to go lower, or will it simply turn right back around and head back up to the orange zone?
Typically, if I’m looking for a breakout scenario, I would like to see a candle body open and close underneath the support. I want to see the full candle body underneath there before I’m going to have confidence that it’s a real breakout and not a false breakout. We could see the current four-hour period has tested and challenged underneath here, but there’s no real significant break.
And that bottom of that blue zone is 0.7100. That’s a double zero level. It’s that even price handle, 0.7100. And so, we don’t really see the market staying underneath there quite yet. Now, if the current candle or the next four-hour period stays underneath the blue zone, it might increase our confidence that it’s a real breakout below that level. And I would say it’s similar to what you see right here.
If we go back to the 0.7200-level, and the market falsely getting above the 0.7200-level here, where the black circle is, a couple of times we saw the market spike above. Get above 0.7200, but never had a full candle body open and close above the pink zone. So, we’re trying to limit the potential for a false breakout by doing this. And so, we’re looking for the market to get underneath 0.7100 and then increases our confidence that we can target down here to the next level, 0.7065, 0.7050 for the AUDUSD.
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.