News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT for insight on London #FX and #CFD trading. Register here: https://t.co/AoM3UvLtcF https://t.co/KCHeNfayki
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/q8nG7unK17
  • Just posted: a fascinating chat with my @DailyFX colleague @HathornSabin on #gold, $USD, $MXN and more https://t.co/vKdwKJZuEF
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.83%, while traders in EUR/USD are at opposite extremes with 67.62%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/sf61r9rewm
  • Gold Prices May Fall Further as US Fiscal Stimulus Hopes Fizzle - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2020/10/20/Gold-Prices-May-Fall-Further-as-US-Fiscal-Stimulus-Hopes-Fizzle.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #XAUUSD #gold #FiscalPolicy #stimulus https://t.co/fS6r9kPXPY
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/UVvf51HiVP https://t.co/5DC2kgetXj
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Silver: -0.15% Gold: -0.20% Oil - US Crude: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/yDIGCBjieN
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.04% 🇪🇺EUR: -0.05% 🇨🇦CAD: -0.08% 🇬🇧GBP: -0.18% 🇦🇺AUD: -0.47% 🇳🇿NZD: -0.61% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/JIAsnaWcPz
  • US Dollar Index Trades in Price Channel Ahead of US Stimulus Deadline - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/10/20/US-Dollar-Index-Trades-in-Price-Channel-Ahead-of-US-Stimulus-Deadline.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr $USD $DXY https://t.co/FAi3oLk9Xu
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: US 500: 0.45% Wall Street: 0.23% France 40: -0.28% FTSE 100: -0.30% Germany 30: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/r3AZEgsPq3
AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

2016-07-22 17:14:00
Jeremy Wagner, CEWA-M, Head of Education
Share:

After a strong sell off in 2013-2015, AUD/USD began to consolidate those losses in September 2015. During that time, we have seen open interest in trading the pair slowly drift lower as the trend quieted down.

For the past 3 months, AUDUSD has quietly carved two bearish patterns in a row which offers an opportunity to position short.

Market Interpretation: Retracement

Bias: Short AUD/USD

Entry: Near .7520 - .7600

Stop Loss:Near .7680 (-80 to -160 pips)

First Target: .7000 (+520 pips)

Second Target: .6500 (+1,020 pips)

There are 3 charts below that work off one another.

First, we can see on the daily chart below, from September 2015 to April 2016, AUDUSD carved an A-B-C expanded flat correction higher. It is an Elliott Wave pattern that suggests the whole pattern is likely to be retraced at some point in time in the future.

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Secondly, as price chopped through the A-B-C correction, open trading interest in the pair plummeted. Traders typically try to pick tops and bottoms. However, they also tend to chase after tops in bottoms in strong trends. As AUD/USD consolidated, their interest in trading the pair waned.

AUDUSD Open Interest Quiets Down

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Then, beginning April 21, 2016, an impulsive wave formed to the downside followed by a three wave corrective move higher. This 5-3 wave combination, especially when it starts a new trend, can be a good pattern to trade strong risk to reward ratio opportunities from.

We highlighted this bearish potential on June 27. That is the first bearish pattern that suggests lower prices to retest .70 if not lower.

Now, from the July 14 high, it appears we are in the latter stages of another smaller degree 5-3 bearish pattern. If this outlook holds, then AUD/USD would be at risk of falling hard in a 3rd of 3rd wave lower. Third waves tend to be the longest and strongest of the Elliott Wave sequence. So it is a force that is recognized when it occurs.

AUD/USD Quietly Coils Together 2 Bearish Patterns in a Row

Therefore, we’ll use any bullish strength into .7520 to .7600 (see above) as an opportunity to short the pair. Other commodity currency pairs like NZD/USD may follow suit as well.

So the first bearish pattern carved from April 21 – July 14. The second bearish pattern is in its final stages with a bump higher.

This trading opportunity includes a positive risk to reward ratio as we are risking 160 pips to target 520 pips (first target). We discuss this as one of our Traits of Successful Traders Learn More here.

Interested in a quarterly outlook for USD? Download our quarterly forecast here.

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX EDU

Follow me on Twitter at @JWagnerFXTrader .

See Jeremy’s recent articles at his Bio Page.

To receive additional articles from Jeremy via email, join Jeremy’s distribution list.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES