Forex

Prodigy tradersdna: Selling #AUDUSD weakness on Rallies into Resistance Zone

Yesterday, the suggestion was to buy the #USDCHF on dips into support. We’ve had two opportunities to see that happen over the past 24 hours. You could see

Yesterday, the suggestion was to buy the #USDCHF on dips into support. We’ve had two opportunities to see that happen over the past 24 hours. You could see the previous downtrend leg falling from the highs, into the 1.0300s, down into the 0.9800s. Then, ever since then, it’s been climbing slowly and pushing back above the parity level – 1.0000.

So, if you did that, unfortunately, the market did turn lower, but now we’re back down into the 1.0000-level, the parity level, as it sits just above that pink zone. Remember this black box that we’ve been studying over the past couple of weeks. So, we know that this parity level of course would be an important decision point for the market.

Anything underneath parity, 0.9995, we would likely look for it to continue lower. So, we know what the risk is. We know that there’s a potential decision zone here for the #USDCHF. Take it on down here to the four-hour timeframe. Again, there was the hesitation. There was the stalling out there above the 1.0070-level. Again, if you took a buy there, then it was a very short-lived buy as it pushed right down through that green zone. We can already see the previous four-hour candle. A short influx of buyers as it went back up, just a little bit back into the green zone, came right back down, but now we’re just settled out back on top of the 1.0000-level. So, for the day today, here on the USDCHF, as long as it stays within or above that pink zone, I’m looking for a buying opportunity. In fact, I’m already in a buy at 1.0010, just above the parity level, being sure to get into it. If we’re going to see it rise, we want it back up here towards the green zone or possibly our resistance target from yesterday, which is all the way back up here into the 1.0100s.

The risk of course is pretty well known. The risk is that it breaks down through here and continues to pressure back down towards the blue-shaded area, into the low-0.9900s. That’s our first trade recommendation for the day today.

Secondly, #AUDUSD of course we’ve been studying the triangle pattern in the Trade Room for several weeks. The rise, the fall, then the rise and the fall. And the current rise and now fall here for the #AUDUSD as we see weakness out of China and strength out of the US with US interest rate change, pressuring this back lower again, as it continues to pressure down towards the multi-month lows that we see here coming into the 0.6900s at the very bottom of the chart. That’s the green-shaded area. We still have a little ways to go before we reach that multi-month low back here on the left-hand side of the chart.

We’re looking for a continuation of weakness. Yes, China continues to be weak. However, expect some strength out of the US with the interest rate rise, so we look for opportunities to go short here for the #AUDUSD. The pink-shaded area, between 0.7010 and 0.7030 we could see support here on the left-hand side. We could see congestion, support, and resistance on the far, far left-hand side, around the pink zone at the very bottom of the chart.

It trades underneath that right now, so any rallies back into that level become opportunities to go short once again here, targeting the multi-month lows back down towards the green-shaded area. We’ll look for an open and close. That gives us the highest degree of confidence. An open and close – four-hour timeframe – under the pink zone, rally back to the pink zone as resistance, a break and retest pattern, and then look for it to go back down. So, an open and close under the pink zone, rally back to it, and then we look for the new fall and target back down towards the green-shaded area.

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