Hello Babypips Forum. I’m Kian. I’m an M.S. candidate in Finance at the University of Texas at Dallas. I just started getting into Forex, and I’ve been doing some technical analysis of my own. I’m posting it here in hopes that I can meet some other forex enthusiasts to trade knowledge. (Hopefully the mods are ok with this! Please let me know if not.)
My research focuses on forex technical analysis; putting strong emphasis on price trends and global economic policy. I’ve worked for JPMorgan in investment data operations; as well as CCP, a supply chain consultation group.
So, the dollar aussie pair has shown volatile swings for the past month. Volumes have been just as sporadic giving traders many opportunities to make some mad pips! We are currently sitting at a price level of 0.7632, sitting atop a small bodied bearish candlestick after a string of bull candlestick periods. Let’s looks at our tools to see if our price will continue this bearish reversal or fake out and rise back up with equivalent momentum.
Reviewing our trend indicators; let’s first look at the ADX lines, our trend lines are stagnating with a flat ranged line. This visual is following accurately with our recent reversal where our uptrend strength went down and is now leveling out with the recent bearish candlestick. I expect the next movement to return above the 50 mark as a downtrend forms with a strong pull, carrying the price down before bear strength exhausts. Bollinger band activity for this pair has been largely unrevealing, however, there has been consistent bouncing between the upper and lower bands with occasional disruption around the middle band. If this pattern holds I expect the price to continue upwards with bullish support in the next few periods. Our IKH trend indicators support an upward movement with possible breakout through several resistance levels. Our price level is now approaching our blue line (Kijun Sen), in past price activity we have seen this resistance level broken a few times with the majority of price movement resting above the range of the Kijun Sen. The most recent interactions with this line show these breaks so I would expect price to spill over and maintain some ground above this price level in the following periods. Our red line (Tenkan Sen) is now beginning to rise again, indicating the start of an upward trend. This follows confirmation from our previous analysis adding confidence to my prediction. The green line (Chikou Span) is inches away from a bottom up crossover, which would also give support to the idea that we will see a continued uptrend in the next few periods. Our last indicator for IKH, the two orange lines and shaded range (Senkou Span), have flattened out, giving price an excellent opportunity to break two resistance levels for the price of one. If I was a betting man I would put my money on a bullish pull through that flat ranged point a few periods on from our current price. Looking to the Parabolic SAR dots; they are sitting at a tipping point, the distance between the price and the most recent dot is almost nonexistent. I predict our dots will flip to the buy side in the next few periods, supporting our bullish uptrend theory.
Looking next to our Oscillators; the MACD line chart have both our fast EMA and slow EMA just now flattening out, it looks like they are about to follow along to a crossover. This cross would support a buy side strategy so look for this switch up in the next few periods. Our RSI oscillator is tittering upwards, slowly gaining ground. If this behavior continues our trend could possibly lose its strength but at this rate, it will take several periods to exhaust. The Stochastic oscillator is borderline on our 80 signal mark. We’ll have to watch the next few periods to see if it breaks through or holds and return to the center.
Overall analyses are supporting a bullish uptrend with possible breakouts if enough momentum is fueled forth. I’m pulling for the bulls for this pair and watching closely for a flash upward swing to cash in on some proper pips.
