AUD Update

Following on from my previous post The Aussie Dollar: On Cliff’s Edge here’s an update of what some of the weekly charts are looking like.

Firstly, here’s a chart I’ve been sharing on twitter this week, AUDUSD monthly.

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Apart from GFC we haven’t seen much follow through after big red monthly candles.
“This time it’s different”. Interest rates, the economy, China, etc. Maybe. But I’m trading the probabilities here and fully expecting a shorter term bounce (as supported by weekly chart below).
Keep in mind I’m only looking at the probability for the month of June here and not looking beyond. The large descending triangle suggests longer term weakness and an eventual 80c, but of course I’m getting way ahead of myself and beyond my trading timeframe.

Below is AUDUSD weekly with parallel lines that I’ve had on there for a couple of years now so I trust their reliability.

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The zoomed weekly below clearly shows the bullish engulfing reversal candle pattern and previous weekly reversal patterns. A 50% retrace (much less than previous reversals) would take us back to 9954.

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Other AUD crosses are showing similar reversal patterns. AUDJPY weekly below shows the reversal “hammer” candle at a long term support/resistance line.

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AUDCHF weekly is another interesting chart. First there is a horizontal level that has been KEY many time previously. Being across several years now it’s difficult to give a precise level but the 8850-8900 area is a broad guide to where it should be. The latest candle is a “hammer” reversal bouncing off the pitchfork support tine (which I have re-aligned, thanks to @totterdell91)

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EURAUD weekly below shows similar reversal candles at a key weekly level.

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GBPAUD weekly below shows the same. But keep in mind it did make a new 3yr high.

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AUDCAD weekly is similar in that it has a reversal candle albeit a weak one. You would have to separately judge the strength of CAD as well and from what I see on USDCAD, the loonie looks stronger than the aussie.

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On my previous post I had included the RSI indicator on most charts to support my views. I’ve omitted it this time as I firmly believe price and price action comes first. And the action loudly speaks near term reversal to me and more upside to come.

(One chart that is probably the most important of all the charts in the world right now is the NIKKEI. If 12400 area fails then ignore all the above. :))

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The Aussie Dollar: On Cliff’s Edge

A huge move by the Aussie Dollar these past two weeks has prompted a closer look at longer term charts of all the AUD crosses. Comments on the charts.

[Click on image to open in new tab then click on 1529×917 to open in full size. Used to go to full size straight away but don’t know why now]

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As you can see most of the charts agree that AUD is on the edge of the cliff.

USD/JPY

With a ripping move in the last two weeks, USD/JPY is on the radar again. Any time the yen weakens we hear about the enormous Japanese public debt and their seemingly eternal easing program and how it’s all going to come crashing down. Then there is the almost comical official “reactions” to yen strength. Since the all time high of about 306 in December of 1975, it made a record low of 75.55 in October of 2011. In the 80’s economic boom the exchange rate moved from 260 in early 1985 to 120 in 3 years – a massive appreciation! When Japanese economy, stock market, property prices peaked in 1990 the exchange rate was 160. All that can be seen on the charts below which will naturally exclude anything fundamental about the USD/JPY. Most charts have comments on them and I’m starting from lower timeframes first.

[click on charts to open in new tab]

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So whilst everyone can see that the loooong term trend is down for this pair, markets move up and down and we shouldn’t be surprised if this pair goes a lot higher. Doesn’t mean it will even though there is a lot of energy about 85.50 in the shorter term.

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The Week Ahead According To 10cents

The title of this post is just my attempt at some humour because I really don’t have a clue what awaits in the week ahead. All I have is ideas for set-ups, some probabilities, and how I will trade them.

[click on charts to open in new tabs if you wish]

It is widely believed that USD/CAD “leads” the other USD pairs. I don’t follow this pair all that much so I don’t know if that’s true or not. What it shows is USD strength late on Friday, much more than other USD pairs. Maybe it was just a result of weak Canadian economic data. Of greater interest to me though are the clear tradeable levels and the hourly RSI clearly in bear-zone. Any serious move by RSI above 70 could be a trend changer.

Above are both the 1hr and Daily charts for EUR/JPY. We had a big 350pip move to end the week, significantly breaking out above previous daily highs. RSI on both timeframes is in the “strength” zone above 70 which indicates to me that the move is strong and will continue so buying dips would be encouraged. We know nothing goes in a straight line and I’d be looking for at least a 100pip retrace if the little double top on the hourly holds. There is also a sweet correlation that a 38.2% retrace move is almost exactly the previous daily high. If hourly RSI goes well below 30 then my bullish view may change.

GBP/JPY – ditto.

I’ve opted for the Daily and Weekly charts of AUD/USD. Friday’s candle was a shooting star at a previous high. I love shooting stars and definitely expect some kind of reversal. I’ve included the weekly chart on the right to show what could happen if there is no reversal or if it is a short-lived reversal. A break above the daily double top would see me a super AUD bull to look for a major double top on the weekly. 106.20 is a BIG line in the sand.

I wasn’t going to cover EUR/USD, it’s been done to death all over twitter and elsewhere but bugger it, here it is. The daily chart on the left shows how huge this move has been – a 1,126 pip move in only 38 trading days. And that 38.2% number has reared its head again. The gap has been filled and a trendline on RSI is inviting itself to be broken. The weekly chart on right only shows a rough channel that could look different depending on points used – a very rough visual guide only. I admit to trying to pick this top a couple times on Friday. I failed and stepped aside. If it fails at 1.3150 again then the choice to short again will be easier.

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