AUD/USD

[Frank D]

AUD/USD monthly and daily Range

AUD currently stalled around the October highs @ 9979.

My view is that the AUD will try and make it's way down towards
the November 50% levels during the 3rd or 4th Week of this month,
and then make higher highs in the first Quarter of 2011 (break parity)


Thursday:- I would have preferred price to have moved down further and be trading
around .9840 (#3) than where it is now.

Trend guide for the next 12 hours as shown in the right chart
@ .9945/54.



Spiral points

As mentioned two days ago (above)… “at this stage I would focus on 41 to 85 pip ranges”

What we can see in the left chart is a 85 pip reversal from the highs on Thursday, but as the trend
is moving down we have 41 pip spiral tops occurring during the day, providing traders
with amply opportunities of getting back into the trend (if you were
screen trading overnight)

The idea is to find ‘observed phenomena’ and use it to your advantage once the parameters align....

"sell higher opens using resistance"

"& buy lower opens using support"

whilst optimizing the daily price action within the larger timeframe cycles.

 

[prawn_86]

Sorry Frank, but i struggle to understand your charts.

As far as i understand on the monthly chart you are targetting around 0.9350? And daily you expect it to stay above 0.99 in a fairly tight range?

 

[Frank D]

I believe for the AUD to continue higher it has to come down and
test support during this quarterly cycle, as it has hit upper resistance
levels @.7979

Now I would like for AUD to turn on a dime and continue down from next
week (3rd Week reversal), but I know that might not happen.
However, to verify a reversal pattern in the larger cycles I
would need to see a breakout of the 5-day lows

If that happens then Price may go down to .9351 or it may not during
this Quarterly cycle (next line of least resistance), but that would be
my ideal pattern because the level that will decide on whether AUD
goes higher will be the November 50% levels (not yet decided), and then extend up towards higher highs in 2011.

When day trading you simply optmise the patterns on a daily basis
and decide on where to enter and where to exit using pattern
formations that exist in all derivative markets :- TIME or Price.

What happened if the 85 pip reversal occurred during the first 12
hours? then all the levels in the next 12 hours shift and change.

Or, what would happen if the AUD actually reversed and
was trading now around 93.40 (#3), it would help verify my
overall expectation much better than where it is currently trading on Friday.

Simply because if price is trading above #2, it can continue up
towards Friday's highs (#4)

do I want to trade longs on friday?

no because it does not fit in with my overall view of the current
cycles (higher timeframe resistance)

 

[Boggo]

Finally it made it...

(click to expand)

 

[Whiskers]

Finally it made it...

(click to expand)

Yeah, corresponded with a simillarly sharp spike to dip it's toes in a new low (since 1995) for the USD/JPY, then rebound more, and more quickly.

Is this a sign traders have had their targets triggered and will be more happy to sit on the sidelines for a bit or re-position for the next dynamic!?

The US runs the risk of inflating too many of the wrong things eg fuel prices and basic (imported) consumer goods if it keeps this tactic up for much longer, at the expense of eating more into consumer savings and income and jeopardizing a better longer term recovery.

But given the overall strength of the Aus economy, it seems to me that the AUD probably won't decline in proportion to the USD recovery in the medium to longer term... unless or untill the Fed starts to increases rates, then there may be a sharp move.

It seems that inventories are continuing to rise staedily, but manufacturing seems to be only slightly contributing to that.

Apart from circulating more cash into and trying to stimulate the local economy, are there any other significant reasons for the US to keep it's $ low atm?

Given the historical strength of the 'consumer' element of the US economy, are their export industries, going to make up enough to offsett increases in imported concumer costs? I doubt it.

 

[MRC & Co]

Soft CPI and dovish Bernanke still couldn't spark a move higher, a lot used that move up to take profits. Big volumes, but still a lot of USD sellers in there.

I wouldn't be on a move either way at the moment, wait and see mode for me, bit of no mans land at the moment I think.

 

[Miro]

There is a good chance it will reverse pretty soon

I remember similar news a year ago

http://www.news.com.au/business/aus...r-over-greenback/story-e6frfm1i-1225939655139

"Aussie dollar set to hit US$1.10 in weeks"

 

[Frank D]

AUD/USD

AUD resistance in October @ 9979, with a precise Friday 5-day high @ 1.00

Trend guide for this week is .9890

If the AUD is going to follow a 3rd Week reversal pattern down, then I'll know
by Tuesday or Wednesday this week.....

confirmed by a 5-day low breakout.

 

[Frank D]

AUD/USD

AUD is pushing down from .9890 towards Monday's lows & the Weekly
50% level with a partial exit zone around the Aussie timezone @ .9826

ideal pattern would be to follow an orderly pattern down during US
timeframe zone, as long is it remains below the key levels in the daily range.

Monday doesn't normally breakout of the lows.

Keep an eye on Tuesday.

 

[Frank D]

AUD/USD

If AUD is going to follow a Tuesday 'sell' pattern, as part of a 3-week
reversal then price will need to drop back down from .9934 and be
trading below .9907 during the next 12 hours and then continue down.

.9907 is Tuesday's 50% level

Otherwise the current price action suggests robust support and
potential upside.

 

[Frank D]

AUD/USD

Tuesday selling hitting AUD. with a 85 pip reversal down from today's
highs.

To verify the continuation of more selling on Tuesday, Tuesday's lows
need to breakout:- 5-day low breakout

The current patterns are playing out as they would normally play out, I
just need to see follow through in today's price action

 

[prawn_86]

Loving the updates Frank. Great insight

 

[hotbmw]

Fantastic Frank.

What are your thoughts now after the overnight sharp drop?

 

[Boggo]

It may follow this pattern down to around 96c.

Just my

(click to expand)

 

[professor_frink]

It may follow this pattern down to around 96c.

Just my

(click to expand)

I'm inclined to agree there Boggo. If that plays out, I won't really be expecting too much either way before the next FOMC meeting

 

[Frank D]

AUD/USD

There is a breakout in the 5-day low on Tuesday, therefore there is
an expectation that the AUD is moving down into Wednesday's lows, as
part of a larger timeframe reversal pattern from the October highs.

Whilst price is above 97.05 is it moving upwards during the 12 hour
period.

There are two possible patterns:-

#1 hits the daily 50% level @ 9777 stalls and then moves back down
into .9705 (and lower)

#2 or it follows a spike upwards into the next spiral filter @ .9814, which
will then be an ideal level to short trade from....

As it matches the breakout from Yesterday's lows, retesting it and hopefully moving back down with a spiral top.

if short or holding shorts from Yesterday, you don't want to see price
above .9815.

 

[Boggo]

AUD/USD

if short or holding shorts from Yesterday, you don't want to see price
above .9815.

Agree, if it does go above 98 then I am back to the drawing board, I am expecting the .9775 area to be significant resistance.

 

[Boggo]

I am expecting the .9775 area to be significant resistance.

Reversed at .9777, initial short target now .9729 for 33 pips.

 

[Boggo]

Stopped out at .9778

 

[Frank D]

AUD/USD

Wednesday failed to continue down as part of the larger cycle
reversal pattern from 9979 and Tuesday’s breakout

My Preferred pattern was for AUD to move up into .9814 and the spiral
top during the first 12 hours and get sold down during the US time zone.

Except the opposite occurred, and the US time zone pushed price higher
85 pips

I would like to think price will continue down based on the larger
cycle patterns, but based on the current price action Thursday can
push upwards.