AUDUSD - Are The Bulls Getting Ready To Push Price Higher?
Updated
Analysis:
When we look at price action we've recently seen a strong rejection off of an area and price is making a move back down however we see this as a buying opportunity. If we look at price action before this rejection we can see that price did indeed form a higher high and a higher low showing us that we're in an upwards trend. This higher low hasn't yet been broken so we're still in that upwards trend. At the start of June there was some real strong momentum on the AUDUSD for the bulls and it looks as if they are currently taking a break before we see a continuation higher. This position will also hedge our other USD long positions so if we are incorrect about the USD strength we expect then we will still be able to profit. As a professional trader you need to remember that your job isn't to make a million percent in a year. It's to make a consistent profit whilst managing your risk. If you can't manage risk then you won't make it as a trader and that's the harsh truth. Hedging allows you to diversify your risk which is why we like to do it here at JPI. Were price is currently is an interesting area to us because if we look left on the chart we can see price has held this zone multiple times as support previously and we expect that this will happen again as very often we see this. For more confluence we saw slowing down momentum for the bears at the start of the week as the candles were very small and were indicating a possible reversal. This was also where the 50% fib retracement level was so there was even more confluence that price was going to reverse there, however we were more interested in level slightly below. Early this morning we had some worse then expected news for the AUD so we saw price push down and tag the 61.8% fib retracement level which is often classed as the strongest fib level and we expect that this is were buyers will be sat at wanting to push price higher. With the slowing bearish momentum that we saw this week around the 50% fib retracement level and with the 61.8% fib retracement level being tagged this "golden zone" which is just the area between the 50% fib retracement level and the 61.8% fib retracement level looks like a great place to enter long from especially from our area which is also in this "golden zone". For more confluence we also have an upwards trendline. This trendline is better seen on the weekly timeframe. When this level has been touched before we've seen bulls step in and push the market higher so we'd expect this to happen again. This trendline is below our entry but above our stop loss so if we we're to go into drawdown then there would be a strong level where we'd expect buyers to step in so this gives us more confidence in our setup. Why don't we enter at this trendline then? Well where price is at currently looks like a stronger area for possible reversals and we don't want to miss this trade as it's a good setup. The upwards trendline is just another confluence to add to our bullish thesis. Fundamentally as of the most recent report on institutional positioning the USD is the strongest major currency whereas the AUD is the 6th strongest major currency so this doesn't go in our favour. However if we dig a little deeper you can see why we currently prefer the AUD over the USD. As of the most recent report on institutional positioning we saw a decrease in both short and long positions on the USD so this is pretty neutral but on the AUD in regards to the most recent report for institutional positioning we actually saw an increase in long positions and a decrease in short positions which is very bullish. This could be early signs that we could see some bullishness for the AUD in coming weeks. Although the AUD news this morning wasn't positive we still have loads of confluence factors pointing to bullishness on the AUD which is why we have an overall bullish view on AUDUSD.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
When we look at price action we've recently seen a strong rejection off of an area and price is making a move back down however we see this as a buying opportunity. If we look at price action before this rejection we can see that price did indeed form a higher high and a higher low showing us that we're in an upwards trend. This higher low hasn't yet been broken so we're still in that upwards trend. At the start of June there was some real strong momentum on the AUDUSD for the bulls and it looks as if they are currently taking a break before we see a continuation higher. This position will also hedge our other USD long positions so if we are incorrect about the USD strength we expect then we will still be able to profit. As a professional trader you need to remember that your job isn't to make a million percent in a year. It's to make a consistent profit whilst managing your risk. If you can't manage risk then you won't make it as a trader and that's the harsh truth. Hedging allows you to diversify your risk which is why we like to do it here at JPI. Were price is currently is an interesting area to us because if we look left on the chart we can see price has held this zone multiple times as support previously and we expect that this will happen again as very often we see this. For more confluence we saw slowing down momentum for the bears at the start of the week as the candles were very small and were indicating a possible reversal. This was also where the 50% fib retracement level was so there was even more confluence that price was going to reverse there, however we were more interested in level slightly below. Early this morning we had some worse then expected news for the AUD so we saw price push down and tag the 61.8% fib retracement level which is often classed as the strongest fib level and we expect that this is were buyers will be sat at wanting to push price higher. With the slowing bearish momentum that we saw this week around the 50% fib retracement level and with the 61.8% fib retracement level being tagged this "golden zone" which is just the area between the 50% fib retracement level and the 61.8% fib retracement level looks like a great place to enter long from especially from our area which is also in this "golden zone". For more confluence we also have an upwards trendline. This trendline is better seen on the weekly timeframe. When this level has been touched before we've seen bulls step in and push the market higher so we'd expect this to happen again. This trendline is below our entry but above our stop loss so if we we're to go into drawdown then there would be a strong level where we'd expect buyers to step in so this gives us more confidence in our setup. Why don't we enter at this trendline then? Well where price is at currently looks like a stronger area for possible reversals and we don't want to miss this trade as it's a good setup. The upwards trendline is just another confluence to add to our bullish thesis. Fundamentally as of the most recent report on institutional positioning the USD is the strongest major currency whereas the AUD is the 6th strongest major currency so this doesn't go in our favour. However if we dig a little deeper you can see why we currently prefer the AUD over the USD. As of the most recent report on institutional positioning we saw a decrease in both short and long positions on the USD so this is pretty neutral but on the AUD in regards to the most recent report for institutional positioning we actually saw an increase in long positions and a decrease in short positions which is very bullish. This could be early signs that we could see some bullishness for the AUD in coming weeks. Although the AUD news this morning wasn't positive we still have loads of confluence factors pointing to bullishness on the AUD which is why we have an overall bullish view on AUDUSD.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Trade active
Price has given us the entry criteria we were looking for and our order has been filled so we're now long on AUDUSD, using this as a hedge against our USD bullish thesis but also because we like the possibility of bullishness on the AUD. We'll be sure to keep you all updated on our thoughts if anything happens!Note
Update - 1Due to the CPI news for the AUD that we had early Wednesday morning we've since seen price head to the downside, putting our trading into slight drawdown. This morning however we have seen the AUD start to recover which was what we were looking for so everything is still looking valid for this trade. Later today we have unemployment claims coming out for the USD. This should provide a lot more clarity for the USD, which in turn would impact our trade. Nobody can predict the future so we don't know if the news will help or go against our trade but like always we'll update you all on our thoughts once we see how the market reacts to the news.
Note
Update - 2Although on Thursday we did see positive figures for a USD news event that came out the market didn't react to the way that we would of expected it to on this pair and instead we put in an inverse hammer candlestick pattern which is a bullish reverse pattern so this gives us more confidence in this setup. The AUD bulls recently have show their strength by pushing price up despite the USD strength, this bullishness favours our bias on this pair. After we had this big push on Friday it put our positions back into profit, which is a positive for us. This coming week we'll be looking to see if this profit can grow and if price is able to make a move to the upside, towards our take profit.
Note
Update - 3Early this morning we had the cash rate come out for the AUD along with the RBA rate statement. Whilst the cash rate came out as expected the RBA rate statement seemed bullish for the AUD which is what we've been expecting to see for a while now. This shows us early signs of bullishness for the AUD and we have more confluences to back this up as well. As of the most recent report for institutional positing we saw the USD stay neutral where as for the AUD we saw a huge decrease in short positioning, showing us that the "smart money" doesn't want to be short on the AUD anymore, so this favours our idea. As well yesterday we had some news come out for the USD which was worse then expected. Whilst this new release didn't provide a lot of momentum into the market it still did help our trade and is something to pay attention to. Tomorrow we have FOMC meeting minutes being released which will provide the markets with a lot of momentum so we'll update you all once this comes out with our thoughts and any updates made to our positions. Currently everything is look positive for our trade and we now have even more reasons to be bullish on this pair, which gives us more confidence then we already had in our trade.
Note
Update - 4This is another trade that we're in that hasn't be that exciting to watch but that's what actual trading is like. Its boring. Very boring, but recently we've seen some interesting price action form. Yesterday we saw some news come out for the USD that was slightly mixed so there wasn't much market bias but we did see our area of support get touched, which price then wicked off of, showing the AUD strength we were anticipating. Price also closed right at the 61.8% fib retracement level which again shows that we might start to see the AUD bulls take over and push price to the upside. If this was to happen then this would be great for our trade. These two things that happened yesterday could be early signs that price is about to pop to the upside and with the NFP data that is coming out today we could see this happen, as well as a breakout above our area of resistance. NFP has the ability to move the markets around massively so this is what we'll be watching out for later today and once we get the data we'll update you all.
Disclaimer
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