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Transcript of Video
I’m going to get started today with a quick recap of the three trades that we discussed during the Trade Room yesterday. First off, here US Dollar versus the Swiss Frank [USDCHF]. If you took a buy here into the 0.9585-level, just on top of the purple-shaded area, as discussed in the Trade Room yesterday, you should be protecting profit as now you are seeing just about 55 to 60 pips of profit on those trades.
So, if you are in a buy from the purple zone on the USDCHF, you should be protecting profit, especially as it approaches this pink-shaded area today and the bottom side of this blue trend line, which we’ll discuss further in the Trade Room today. You should be protecting profit, looking to close profit for a potential reversal to go back down for the USDCHF on an intraday basis.
Next, we’ll move on over to the US Dollar versus the Canadian Dollar [USDCAD]. If you took a sell close to the top of the yellow-shaded area, 1.1650, as discussed in the Trade Room, yesterday we saw – let’s put the crosshair right on it. We saw about 40 or so pips on the Trade at the lowest point. If you took that trade, of course you probably went to break even or better on the push down into 40 pips, towards 1.1600. If you did that, you’re likely out of that trade again.
If you decided to enter again, close to the 1.1650-level, your risk is likely above these highs that you see here into the 1.1670, looking for it to turn around and go back down. Just be cautious. Your risk in this scenario is that it finally breaks out of this resistance and continues to pressure higher for the USDCAD.
And one last trade that we discussed during the Trade Room was the buys on the USDJPY from the blue-shaded area down here at the bottom of the chart, towards the 116-level. If you took a buy down there, it was a pretty decent trade as we saw the climb from 116, all the way back up here. 150 to 160 pips back into the orange-shaded area. If you locked in just underneath the yellow-shaded area, it’s likely that you’re out of that trade at this point, but clearly a profitable trading opportunity.
Likely to see and we already are seeing resistance under this green trend line, orange-shaded area. On a breakout above the orange-shaded area, you’ll look for it to continue to pressure higher. That’s assuming you are holding buys from the 116.00-level. This is not your time to buy it. Your buys were down here. So, be cautious about buying it, but likely looking to close profit on the buys or potentially looking for opportunities for resistance and reversal here for the USDJPY today.
Now, those three trades behind us, let’s go ahead and move on over to the Australian Dollar versus the US Dollar [AUDUSD]. I want to talk about a couple of opportunities that we could look for here today on the AUDUSD. We’re starting all the way out on the Monthly Chart, and I think the most important part about this is this yellow-shaded, highlighted area. There’s a red, horizontal line right on top of it also. That’s where we’re looking. That’s where the current market price is.
Don’t focus on that yet. Let’s go back here to the left-hand side. You could see support right back here. That’s 2010. Support. Reversal. Went up in the direction of the uptrend. You could see some support here. Spiked underneath it, but held as support during that month and went back up again. Let’s even scroll back in time a little bit more, and it’s quite a bit further back. We’re going all the way back into 1996. You could see resistance under that yellow zone. So, most importantly, what I’m trying to demonstrate here is the clear decision zone.
As long as it’s above it, we see support and reversal to go back up. If it’s underneath it, resistance and reversal to go back down. Today we are on top of that support level. Let’s take it down to the Weekly Chart, and you can begin to see clearly how we’re down here into the support and into the yellow-shaded area. There’s the 0.8185 to 0.8118-level, down there at the bottom. That is our support.
One thing we did during the Trade Room yesterday was take some Fibonacci retracement measurements in a little different way. Went from where that black X is at the red box, down to this low right about right here. So, that little leg of the downtrend. Interesting because that puts the 1.618 Fibonacci extension at 0.8179. That’s the top of our yellow-shaded area. So, very interesting for support there. We’ve already looked back in time, but I want to go ahead back here on the Weekly Chart. Take a look at that red line, yellow-shaded area the last time we were here.
Support here. Support here. Resistance here. So, clearly a decision zone, where the market makes a trading decision. So, as long as it’s on top of it, I’m looking for support. Let’s take it on down to the Daily Chart. Here we are again, finding support there. Over the past several days, weeks, we of course have been focused in on the downtrend, looking for selling opportunities, selling in the downtrend, but today not a great opportunity to sell. In fact, it’s a terrible opportunity to sell it at this point. As we’ve seen and demonstrated, there is much evidence of support here.
So, more likely, instead of selling now, you’re starting to close sell trades or at least protect profit. If you’re not in a sell, then, at this point, don’t sell it. You’re more likely looking for support and potential intraday reversal for this currency pair to go back up. Even if you were looking to sell it and want to focus in the direction of the downtrend, the better opportunity to sell it would be back into resistance, so obviously you’re not there right now. So, sellers are likely looking for it to reverse, go back up for a period of time, likely even back in towards the mid to upper-0.8200s, towards 0.8300, the pink-shaded area before you would even sell it again anyways.
Let’s go ahead and take it on down to the 4-Hour Chart. There’s our yellow zone that we were just discussing. There’s the pink-shaded area just above the market. Blue trend line coming down from the top shows that at least right now we’re nowhere near that blue trend line. Getting back above this yellow-shaded area clearly, or even 0.8200, would look for it to go back up towards the pink-shaded area as the next point of resistance here for this pair. We may adjust this pink-shaded area a little bit later on in the Trade Room today, but at least at this point, I don’t believe you want to look for selling opportunities today. I think you’re looking for likely support and reversal clues and evidence of reversal to take this back up once again.
We might look at some resistance right here into 0.8212 or so. We’ll keep an eye on that. Above there, we clearly will start to move back up towards the pink zone. Under it, we might look for a little bit of a push, but I would be very discouraged about selling on top of this yellow-shaded area today. So, for me, over the next few days, it’s likely looking for support and evidence of reversal to take this back up one more time into resistance for the AUDUSD.
