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AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

By , Sr. Technical Strategist
22 November 2013 21:49 GMT
  • USDJPY still faces 101.52
  • Tracking a possible AUDJPY opportunity
  • AUDUSD and NZUSD breakdowns and trading tactics

11/22/2013 Technical Focus Video

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Jamie is the author of Sentiment in the Forex Market.

USD/JPY

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_8.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDJPY has broken above the trendline that extends off of the Jul and Sep highs and re-tested the line as support on 11/19.

-The market still faces the 101.52 (Jul high). Of note is the fact that the Nikkei (USD) has already broken above its Jul high. Is USDJPY just lagging or is the Nikkei wrong? There is no way to know in advance. Just know that the USDJPY hasn’t confirmed the Nikkei’s strength just yet.

-Possible road blocks after 101.52 but before the May high include 102.50 and 103.15.

Trading Strategy: I am long (trigger was 99.85). Stop is tightened to 99.55 and I am on the lookout for a chance to add to the position.

AUD/JPY

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_7.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-AUDJPY is testing trendline support following the outside day reversal on 11/20. The 11/20 close is possible resistance at 93.37.

-A break below 92.30 (daily close) would suggest that a larger retracement of the rally from the August low is underway.

Trading Strategy: This is just a possible setup at this point (not even a setup). Fear of a failed USDJPY breakout and record high equity market is reason enough to track this market though.

AUD/USD

4Hour

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_6.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-AUDUSD covered the 9/13 close (.9243) this week and confirmed a head and shoulders top. The weak right shoulder suggests an exceptionally vulnerable market.

-.9250 and just broken support at .9267 is now the estimated resistance zone. Near term support may reside between .9069 and .9115.

Trading Strategy: The first target was hit at .9250. The stop on the remainder is lowered to .9450. Plans are to add to the position above .9250.

NZD/USD

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_5.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-The NZDUSD remains one of the more compelling longer term bearish possibilities. Consider that…

-The decline from the April high unfolded in 5 waves (impulsive), the advance from the August low is defined by converging lines (pennant, common in bear market advances)

-A head and shoulders top was confirmed this week. Resistance is estimated from .8190 to .8230.

Trading Strategy:Looking to short early next week…probably above .8200 and as high as .8265.

EUR/AUD

Weekly

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_4.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-I’m showing the EURAUD weekly chart in order to highlight how much more upside is possible. Major resistance isn’t until just below 1.5500. The measured move on a break above 1.5030 would be 1.6009 (1.5030 + (1.5030-1.4050)).

-The 8/30 uncovered close at 1.4840 and 8/28 close at 1.4920 are possible resistance levels. Places where the rally paused on the way up may serve as support in the near term. The levels in question are 1.4730 and 1.4685.

Trading Strategy: Looking to go long again below 1.4700.

USD/NOK

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_3.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDNOK broke above a 3 year trendline in June. The topside of that line was tested as support in September (the test was in the form of a spike on ‘no-taper’).

-The market is consolidating around the 10/10 high (6.0730).

Trading Strategy: Several more days of weakness into a trendline confluence may be in order before we attempt longs. Keep 6.0000 in mind.

USD/SEK

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_2.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

Automate trades with Mirror Trader

-USDSEK took out the Sep high on an intraday basis 2 weeks ago. A near term topping pattern formed this week.

-The top side of the recently broken trendline is likely support in the coming days/weeks.

Trading Strategy: Currently short, looking to flip long at lower level…probably between 6.4650 and 6.5240.

USD/MXN

Daily

AUDUSD_NZDUSD_Breakdown_Trading_Tactics_body_Picture_1.png, AUD/USD and NZD/USD Breakdown; Here are Trading Tactics

Chart Prepared by Jamie Saettele, CMT using Marketscope 2.0

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-USDMXN continues to ‘triangulate’.

-The market responded to trendline support drawn off of the closes this week. Failure to hold 12.85 would open up the trendline drawn off of the lows closer to 12.78.

Trading Strategy: Continue to monitor for support. 12.90 is possible support ahead of 12.85. Eventually, a significant bullish break is possible (nearly 5 months of symmetrical triangle to this point).

--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com

To contact Jamie e-mail jsaettele@dailyfx.com. Follow him on Twitter @JamieSaettele

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22 November 2013 21:49 GMT