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I’m going to get started today on the Australian Dollar versus the US Dollar [AUDUSD]. Starting here on the Daily Chart, over the past several weeks, we’ve been studying this longer-term uptrend. We began all the way back here at the end of January, down into the mid-0.8600s, and it’s been climbing ever since, pushing all the way to the highest high, into the mid to upper-0.9400s, capping out at the high up here, above the green-shaded area at the top of the chart.
Over the past several weeks though, we have seen some resistance here into the green-shaded area and a fall as it’s come back down towards the mid-0.9200s. Over the past several weeks though, we have taken buys a couple of times here, in towards the 0.8900-level, down here towards this bottom blue-shaded area where the trend line is. We took buys down there. Then we saw it go into a period of congestion here in the yellow zone. The breakout of the yellow zone saw a push back into the green-shaded area.
If I zoom out one time, we can go along that green-shaded area at the top of the chart and see historical resistance back here. We could see some congestion. We even see some support. It’s a little hard to see back there. Let’s scoot it back over here a little bit. A little support over here on the far left-hand side of the green-shaded area. So, support, congestion, resistance, and now we see the resistance once again into that green-shaded area. So, as we zoom it in there, we can see that we have found resistance. We’ve fallen back down against the overall downtrend.
We’ve seen this before. Take a look down here, where we saw the market going up from back in January, found resistance, pink zone, fell to the blue zone, found support, and then started going back up in the direction of the trend. So, similar to this down here, we’re seeing that dip back down into support within the overall uptrend. Remember: an uptrend has higher highs and higher lows. And it’s my expectation that as long as it stays above this area of congestion and above this yellow-shaded area that I would be looking for buys in the direction of the trend. Put that arrow there, so it’s my expectation, as long as it stays above the yellow-shaded area, then I’m looking for buys on dips into support and above that blue trend line.
If it breaks through this area of congestion and through that yellow-shaded area, let’s go ahead and put this right here. If it gets through there and that blue trend line, then we’ll look for it to continue to go down for the AUDUSD and a change of the overall trend. One last thing here on the Daily Chart. I’ve taken Fibonacci retracement measurements from the lowest low on the chart to the current resistance high. Low to high of the last uptrend puts the .236 fib at 0.9271. That is where we are finding support.
So, if you were with me during the trade room yesterday, you’ll know that I took buys into the 0.9263-level. That’s my actual entry point. 0.9263. We’re now sitting at 0.9290. If you have been following along with my personal methodology, whenever I see 20 to 25 pips, I move my stop to break even. So, at this point I’m at break even, can’t lose on the trade, and we’ll look for it to continue towards the pink-shaded area. The pink-shaded area, close to the 0.9320s is my first target for the buys that I have. I’ll be peeling some profit off there, into the 0.9320s, and then I’ll begin looking for it to continue to pressure higher, making higher highs and higher lows within the overall long-term uptrend.
Right now, of course, like I said, the pink-shaded area is some resistance right there. We’ll be looking for resistance target there. If we can get above the pink-shaded area, we’ll be looking for it to go back to the highest highs. And if, at any point, we break above the highest high, which is the green-shaded area up here at the top of the chart, we’ll be looking for it to continue the longer-term uptrend, potentially back up in towards the 0.9500 or even into the 0.9600s for the AUDUSD.
Taking it down here towards the 4-Hour Chart. And as we get down here to the 4-Hour Chart, we could see that the market has been moving up since yesterday into that yellow-shaded area, into the 0.9260-level. We could see that the Forex Black Book trend bar is green. Now, we don’t have a recent green arrow. Our last green arrow was back here before it moved up, in towards the upper-0.9300s. We haven’t seen a recent arrow here for the currency pair, but I would suspect the longer it sits here on top of this yellow-shaded area as support, we could see a new potential green buy signal for the Forex Black Book indicator. It could be today, maybe early next week, but definitely something to watch for.
So, for those of you that were in the Trade Room took buys along with me here into the yellow-shaded area, into the 0.9620s. Protect that profit as it continues to pressure higher. Seeing close to 25 to 30 pips now on the trade. Again, my first target comes up here in towards the 0.9320-level. And then, beyond there, we’ll begin looking for it to continue to pressure higher from there. All of the text over here on the left-hand side of my chart is part of the advanced loss recovery algorithm that Dustin and I have been testing over the past several weeks. We’ve discussed that a little bit in the Trade Room yesterday. We’ll do that again today, but basically, right now, there’s no need for it.
The advanced loss recovery algorithm is there to help us if the trade doesn’t go as expected. I took a buy here at 0.9260, looking for it to go up, and that’s exactly what’s been happening. If it would’ve broken underneath 0.9220, underneath the yellow-shaded area, then that’s when the advanced loss recovery system would’ve taken hold and begin to work my way out of a losing trade at that point. But at this point, it hasn’t been a necessity for the current trade that I’m in. And if it makes it up towards the 0.9320-target that advanced loss recovery system will be deactivated and we’ll no longer be needing that, but that’s what that’s there for. If the trade doesn’t go as expected, then the loss recovery system takes hold and starts to work my way out of that trade, and we’ll discuss that a little bit more during the Trade Room today, if it doesn’t go ahead and reach the profit target today for the AUDUSD.
But that’s what I’m looking for. Buys on dips into the yellow zone. Already in profit on one trade. If it goes back down, finds support again, we’ll be looking for a new opportunity to buy it. At this point, not really looking to sell it. But if you are, your first resistance will be here at 0.9320 to 0.9340, the pink-shaded area, for the AUDUSD today.
