And back up we go. Anyone trading this channel would have made out like a bandit.
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Tuesday 04/04 update -
I was thinking on Monday night that I had missed the bullish bus and over-focused on following a non-existent downwards bias. However, bullish though Monday’s bar was, the market is not following through. We saw a lower close on Tuesday, and price is falling even more rapidly today.
But all evidence is still evidence, everything on a chart says something. So Monday’s outside range bar could be very useful here. It offers new definitions of the trading channel with its widely separated high and low. I have a sell just beneath the bar with stop-loss just above as all else concerning this chart and AUD looks bearish. But its valid also to put a buy just above the high with a stop just below the low. If price breaks out of the coiled spring tendency, it could move quickly. Which is one of the beauties of trading this pair as opposed to EUR/USD for example, and other majors.
Have a good day.
There was an RBA Interest Rate announcement at 2.30PM (GMT+10) Tuesday in Australia.
After ten months of consecutive rises… No change… 3.6%… Rates are biting hard…
Rate was predicted to hold at 3.6%…
AUDUSD goes up if Interest rate is increased… AUDUSD goes sideways if interest rate is held… AUDUSD goes down if the rate decreases…
The USD is getting smashed this month, just not as smashed as the AUD yesterday.
Rate announcement is the first Tuesday 2.30PM (GMT+10) of the new month.
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Despite the fact that the support level (0.67200) for Tuesday’s daily low has been breached and the time price chart indicates bearish momentum, with the immediate hourly candlestick making NEW Lows, my opinion is that the main directional bias should be bullish based on the Swing Theory. This is due to the presence of a series of LL, HL, LH, kk from a larger weekly perspective.
Lower Low (LL) : 0.66252
Higher Low (HL) : 0.66509
Lower High (LH) : 0.67378
Higher High (HH) : 0.67932
No doubt, when comparing the Bear Power TROUGH (-0.00342) with the Bull Power TROUGH (-0.00127) at 1500hr and 1600hr respectively, it can be observed that the Bear Power is Stronger.
And, it is also evident that the Bull Power is weakening when comparing the Bear Power PEAK (0.0005) with the Bull Power PEAK (0.00269) at 0300hr and 0500hr respectively.
Taking a bearish stance wouldn’t be wrong.
IMHO, unless the support level (0.66500) for Swing LOW is breached, AUDUSD remains bullish.
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Hi @alphahavoc - This is all good stuff. As you will have gathered I am no longer in the TA camp which holds that signal X means market Y is going down. Rather the one that says that as all my bearish criteria align, if price goes down to/past here, I would rather be short, and if it doesn’t I would rather be in cash.
Of course, AUD/USD fell off my sell list as soon as it closed above the 50EMA. But for the purposes of this strategy, it won’t be a trend-following buy for ages yet. That doesn’t make it not a buy for other strategies, especially given the power of Monday’s bar.
Coincidentally I’ve been looking at Larry Williams’s Smash Day Strategy, and this set-up clearly qualifies. Simple, worth a look.
Just finish reading up on Larry Williams’s Smash Day Strategy
I concur, it’s definitely worth a read. The strategy is sound and straightforward. From my personal perspective, I would suggest incorporating a filter for Larry’s smash with a breach of 5 daily High/Low to confirm a trend reversal.
Unwittingly, I may have been adopting a similar strategy for quite some time now. Thanks for sharing.
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