As mentioned in this weekend’s MarketScope, the AUD looks weak compared to the USD in our opinion and today’s close as an engulfing bearish pin bar reversal has given us a potential entry for a short-term sell.
In terms of market “context”, the seasonal argument points to a sell with a bearish outlook with the Aussie Dollar traditionally performing poorly at this time of year (according to the last 20 years worth of aggregate data).
From a technical perspective, today’s close as a bearish pin bar reversal engulfing Monday’s bar represents our bearish confirmation. Even though today’s bar is a little bigger than desired, it’s rejecting the previously held support level @0.93350 as resistance. It also represents the third lower high in its downward moving cyclicity on the daily timeframe. This, in addition to the presence of “hidden”
divergence on the RSI indicator (with a higher high in contract to the lower high on the daily0, concludes our argument for a sell move.
Many traders will lace their entry at the low of today’s close (minus spread and that additional pi) with a stoploss above the high (plus spread and an extra pip), and will ride it down to the previous swing low for a conservative target (take profit 1).
Those hungry for an outcome with higher reward potential could target the next level of support @0.9222 which also coincides with the completion of an ABCD pattern.
Remember, while we play with probabilities in the markets nothing is ever guaranteed!
In terms of market “context”, the seasonal argument points to a sell with a bearish outlook with the Aussie Dollar traditionally performing poorly at this time of year (according to the last 20 years worth of aggregate data).
From a technical perspective, today’s close as a bearish pin bar reversal engulfing Monday’s bar represents our bearish confirmation. Even though today’s bar is a little bigger than desired, it’s rejecting the previously held support level @0.93350 as resistance. It also represents the third lower high in its downward moving cyclicity on the daily timeframe. This, in addition to the presence of “hidden”
divergence on the RSI indicator (with a higher high in contract to the lower high on the daily0, concludes our argument for a sell move.
Many traders will lace their entry at the low of today’s close (minus spread and that additional pi) with a stoploss above the high (plus spread and an extra pip), and will ride it down to the previous swing low for a conservative target (take profit 1).
Those hungry for an outcome with higher reward potential could target the next level of support @0.9222 which also coincides with the completion of an ABCD pattern.
Remember, while we play with probabilities in the markets nothing is ever guaranteed!
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