Want FULL ACCESS To
ROSS’ DAILY TRADE ROOM?
Simply Click The Get Started Button Right Now!
Transcript of Video
Click Here to receive an email alert when Ross posts a new daily video
I’m going to begin the day today on the Australian Dollar versus the US dollar [AUDUSD]. Over the past several days, we have seen this currency pair find supper into the pink-shaded area that you see here in the middle of the chart, right around the 0.9300-level. Today and the past three days finding support along that 0.9300 zone.
Follow it back in time, not only have we seen support over the past three or four days, but go all the way back here into September, where we saw support along the same 0.9300-level and this pink-shaded area. You follow it a little further back and you see some support and resistance right here into the beginning of September, September 12. Around that timeframe. Then you follow it back even further back in time. You go all the way back here to the left-hand side of the chart. We’re going back into July. Some resistance underneath that pink-shaded area. We go here, into July 11th, resistance under the pink-shaded area, and then we go all the way back here into June and we see resistance.
So, this price level around 0.9300 and this pink-shaded area has historically shown to be a significant price level. A key decision point, where buyers and sellers are making decisions to enter and exit the market, and that’s factual in history. So, we go back into the current time and we can see, over the past three or four days, finding support here into this pink-shaded area. So, if we’re going to see a continuation of the downtrend, of course we’ll need to see a breakout underneath that support. A push underneath that pink-shaded area, a push underneath the 0.9300-level, likely looking for the continuation down into the blue-shaded area as our next potential support target, down closer towards 0.9200.
Now, of course that could change. If we continue to see support here, we could see a bounce of reversal, a turn back towards the yellow zone, which we saw over the past couple of days. We saw a challenge of that yellow zone, here into the 0.9380s, towards the 0.9400-level. And of course, a break above that black trend line and a break above that yellow-shaded area, we look for a reversal and a continuation of the previous uptrend that we see on the left-hand side of the chart. Not only that. If you take Fibonacci from several different ranges here on this Daily Chart, I’ve taken Fibonacci from the lowest low down at the bottom left to the current high. I’ve taken Fibonacci from the low here into the pink-shaded area – the last time we were here – to the current high. And of course, from the current high down to the current low.
I’ve taken all three of those fib ranges here with this Daily Chart. And in doing that, we can find the 50% of the longer leg of the trend. From the lowest low to the highest high, the 50% sits right here into the pink-shaded area. So, clearly, if we can break through the 50% retracement level and the pink zone, the next fib comes into view and we look for the .618 right down here into the middle of the blue-shaded area, right into the 0.9190-level. So, that becomes our next potential support. The .382 of that same previous uptrend leg sits right here in the middle of the yellow-shaded area.
So, right now, Fibonacci from that previous uptrend really helping us identify our current support, our current resistance, and our next potential support for the AUDUSD. Now, of course, the Forex Black Book trend bar is bright red. That gives us a higher degree of expectation that we should be looking for selling opportunities. It’s a long, bearish, black trend line. So, those two opportunities to sell along the bearish black trend line and in the direction of the red trend bar come in two directions. We look for a sell into the yellow-shaded area and into the black trend line. So, a sell on a rally into resistance becomes an opportunity, closer towards the 0.9380-level, or the other opportunity to sell comes on the break – the final break – of 0.9300 and a push underneath the pink zone.
Now, I wouldn’t have high confidence that it’s going to continue to pressure lower until it breaks underneath here, because we have found too much support here over the past four days to really have confidence in selling it as we’re sitting down on top of this support. So, what we need to see is a breakout underneath this support, open and close, likely underneath 0.9295 or so – the bottom of the pink zone – before I have confidence it’s going to continue to pressure down towards the blue-shaded area. Otherwise, buying into support is a possibility with fairly low risk. Reward becomes the yellow zone as your resistance target. And of course, beyond that, you look for it to continue to pressure higher, back towards the 0.9500-level.
Let’s take all that information down to the 4-Hour Chart and get a little bit of a closer view of this here for this currency pair today. And we see the market contracting here. The lows getting higher. Let’s go ahead and just put a temporary trend line here, just to view this. We can see the lows getting higher along this area here. We can see the highs getting lower along this area. So, we can see some contraction here for this currency pair inside this triangle. Of course a break of that pattern, a break of the lows, look for it to go lower, or break of the highs and specifically probably this black trend line and the yellow-shaded area, we’ll likely look for it to go back up again.
So, your opportunities lay out just like this today. It’s not different than what we just mentioned on the Daily Chart, but you could see it a little bit closer here on the 4-Hour Chart. The pink-shaded area, of course, is current critical support. Holding above it, potential bounces back in towards the upper-0.9300s, towards 0.9800 and the yellow-shaded area. Selling opportunities closer towards 0.9380 become your best opportunities. Lowest risk opportunities. You target the pink zone or lower. Selling underneath the pink-shaded area, wait for an open and close underneath there for it to go lower. Otherwise, as it sits here into the pink zone, you could be looking for buys to target back to the yellow-shaded area. Above the yellow-shaded area, look for a continuation higher. It’s my expectation and my highest confidence right now that I would be looking for sells in the direction of this 4-hour trend and in the direction of the red trend bar for the Forex Black Book and the AUSUSD today.
