The AUSUSD uptrend could be in trouble if 0.7600 breaks but so could the year’s downtrend if it holds
There’s always multiple ways to read a currency.
Here’s the year’s trend so far in AUDUSD.
AUDUSD daily chart
A solid and undeniable downtrend. Sell those rallies! But, trends aren’t straight lines and we always have dips that find support, so how do we try and define where a trend might end?
Here’s the weekly chart;
AUDUSD weekly chart
A vastly different picture.
Trading the Aussie is horses for courses, some might be running with the shorter-term trend while others, the longer-term. What these two charts highlight is that all traders need to be aware of the picture on both long and short timeframes. If the short-term traders are wondering where their downtrend may end, they need to look at the weekly chart. Longer-term traders need to watch the daily chart to see how strong that trend is and whether it puts the long running uptrend at risk.
What we have now is the possibility of something changing in AUDUSD. The downtrend looks set to hit the trendline of the uptrend. It will either bound or it will break. That simple conclusion gives everyone a trading opportunity. Shorts can look to take some profit perhaps, longs can look to add or enter in the hope that it holds. We have a definitive area to watch and trade. We don’t need to mess around in the middle, we can wait and see what happens and trade it if we like what we’re seeing.
I like the look of this picture technically. There’s enough good looking support around the 0.7600/40 area to try a long to see if the support holds. We have old S&R at 0.7638, the 100 WMA at 0.7631, the old 38.2 fib of the 2015 rally at 0.7620, the trend line at 0.7615, and the big figure at 0.7600. What more could you want from a chart?
The trend line has looked very solid on tests so that’s my main decider for a long. If I take a long I’ll give it maybe 20/30 pips stop under there but I’ll look to start scaling in around 0.7620/25 if we see it. As always, I’ll judge any move on its merits at the time to see what’s driving it.
Let me know what your thoughts are on either trend, and which one you’re trading.
Philosophy: “Don’t be a Dick for a tick”
Read how Ryan got into trading here
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Similar case, just on even higher TF is at EURUSD pair. If it closes March below Monthly 100 and 200 MA’s as well as below downward sloping multi year TL, then we are still clearly in dowtrend. https://uploads.disquscdn.com/images/7e4bdf68a21b191dfb698896f6287f84d0c2d46f562042874e43e7e36c51fa78.png
Yep, exactly, the same thing, just the other way around.
interesting post – for me the price is moving lower for today – in terms of placing a trade it really depends upon the target if I am looking for 20,40 or 50 pips I might go short but if I am looking for 200 + pips then I will have to wait for a good long trade entry.
That’s exactly right John. You have to set your parameters for the different time frames