GBP/AUD daily chart is in risk for forming a negative divergence in the RSI as well as a shooting star reversal pattern, the analysis is simple. Wait for a daily close and short GBP/AUD with a target at the 21MA (the blue line). I am using the ATR to calculate my stop (150%), which is around +157 pips stop with a take profit of around +280 pips.
Price didn’t react much to the horizontal levels as it simply trended slowly upwards. Draghi’s speech seemed to be the catalyst, as he assured the markets that the ECB had sufficient backstops in place to help debt-troubled euro zone nations. I must admit, it would’ve been very hard to pick out trades!
Resistance line:1.3031
Bullish targets: 1.3061, 1.3092
Support:1.2970
Bearish targets: 1.2939, 1.2908
The pair generally trended lower due to risk aversion. Apparently, there was a lot of skepticism over Spain’s balance sheet. Analysts believe that the nation could have a hard time finding buyers for its bonds in the auction that would take place later in the week.
During the U.S. session, both U.S. and Canadian banks were closed due to the holiday, so the pair barely exhibited movement and mostly consolidated.
hi bigpippin…can u tell me what is mean by risk aversion…?
Hello, fxsrikanth!
Risk aversion is a concept in psychology, economics, and finance, based on the behavior of humans (especially consumers and investors) while exposed to uncertainty to attempt to reduce that uncertainty. More details are here: Risk aversion - Wikipedia, the free encyclopedia
There are 2 concepts to understand in trading. One, market is forward-looking. It always looks ahead. The pertinent question to ask in trading is not “What just happened?”, The stock market usually looks ahead about 6 to 12 months. However, the forex market only looks ahead for the next 1 to 3 months. For example, the market has been looking ahead for ECB and FED to do 2 things since mid-July. EURUSD was expecting ECB to introduce some sort of bond buying for troubled countries like Spain. And for FED to unleash QE3 to help pull the US out of its doldrums. Both of these programs were unveiled in September, which gives the time lead of about 1.5 to 2 months. This explains why EURUSD formed an inverted head and shoulders and turn bullish on mid-July.
Two, because the market is forward-looking, the better question to ask is “What’s happening next?” So what is happening next? What is the next BIG news that the market is anticipating for? The next BIG news is for Spain to request for an official bailout. So the ECB’s OMT policy can be officially started. The market expectation for the bailout is a matter of when, not if. When is Spain going to ask for bailout? There is some news from the Obama Administration to delay the bailout request until after the US presidential election on 6th November. So it has to happen before or after the presidential election. From what i can gather, my best guess is either between 20-31st October or 12-16th November.
From the technicals point of view, EURUSD is in a possible ABC wave correction. The bailout request is consider to be bullish for euro. Watch for it to turn either at 1.2740-50 (38.2% retracement) or 1.2600-10 (50.0% retracement) BEFORE the bailout becomes front page news.
After strongly closing below the 1.2950 minor psychological handle, EUR/USD bounced back up to test the level for resistance. Please tell me some of my homies got in on the move!
Resistance line: 1.2878 Bullish targets: 1.2908, 1.2939
Support line: 1.2817 Bearish targets: 1.2786, 1.2756
EUR/USD didn’t move much yesterday, as high-profile economic data were in shortage. The pair simply moved sideways with a slight bullish bias. Here’s the chart:
Resistance line: 1.2908
Support line: 1.2817
Aims of bulls: 1.2939 1.2970
Aims of bears: 1.2786 1.2756
EUR/USD found support around 1.2850 yesterday. Buying at the minor psychological handle would’ve gotten you some mooloah enough for a few bling-bling!
hi bigpippin…i got that move yesterday…hmmmm but…i have a doubt from the day i started fallowing this thread…that is why u r analyzing with 15min chart…but not not on any other intraday day charts…like 30 min,1h etc…
is there any reason? can you please tell me that?
I use the 15-minute chart and not any longer ones so that people can clearly see how price reacts to news reports. Also, anything shorter can be hard to put up on the forum, as the candles tend to get very small. But of course, nobody is stopping you from using higher or lower time frames in your own analysis.
Not much movement on Friday despite the two major reports released. There was one good trade though. You could have gone long on the second test of the DO and closed as soon as price consolidated around 1.2975.
