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Transcript of Video
I’m going to get started today with a little recap of yesterday’s trading from the Trade Room. Here, on the EURUSD, sells taken right around the 1.2430, 1.2435-level. Underneath the red trend line, you could see a little bit of a wedge developing here on the EURUSD. Overall, still a long-term downtrend, but a little bit of a wedge developing here.
Selling into the top of that wedge, into the red trend line and into some historical support that acted as resistance yesterday. You take it on down here to the 4-Hour Chart. You could see the sell orders still sitting there, right around, again, the 1.2435-level. Locked in at this point with one pip, but if you’ve moved your stop down, it’s likely down here, closer towards the 1.2400-level. Today, if we’re going to see further movement down, we need to see the breakdown of 1.2370. You could see we’re kind of stuck in this yellow-shaded area. Needs to breakdown 1.2370. We’ll look to target back down to the green zone if we can get it underneath there. If it can’t do that, then we could see another challenge right back up into the orange zone and the red trend line from the wedge here on the EURUSD.
So, just a little recap there of the trade still holding from yesterday’s Trade Room. One more currency pair that we traded during the Trade Room was the AUDUSD and we’re going to focus our attention this morning on this currency pair. Overall, a long-term downtrend. You could see it’s been going down for quite some time. Went into a period of congestion, ranging right here, broke down in the direction of the trend again, now finding support into the upper-0.8200s. The red line sits at 0.8285. That’s our current support.
We could see a little bit of a rally coming back up now towards the 0.8330s, capping out 0.8365, 0.8370 yesterday, as it pushed back up towards the short-term blue trend line that you see here, just representing this little down leg of the downtrend. As it comes back up, we’ll look for more resistance right there into that yellow-shaded area. Let’s go ahead and zoom it in here on the Daily Chart. And as we zoom it in, you could see there’s yesterday’s candle. A little bit of a challenge there into the 0.8360s. That’s where we took the sell in the Trade Room yesterday. Profit made as it pushed back down here into the upper 0.8200s, so you should have been protecting profit at that point for the AUDUSD.
Did not break down through 0.8285 as we were hoping. Didn’t open and close underneath it, and now coming right back up. I believe that that same area that we traded yesterday will still present some opportunities to sell in the direction of the overall trend. Let’s take some Fibonacci from this high first. Let’s go right here, where this dominant high is, down to the current support low. In doing that, we find the .236 fib sits just underneath the yellow-shaded area, right around the 0.8358-level or so. So, that, again, will help us identify some potential resistance for this pair.
Let’s take one more fib. It won’t really be a whole lot different. Let’s go from the top of the upper blue trend line, down to the bottom. You could see the .236 fib of that range sitting just at the top of the yellow zone. So, the yellow zone, some Fibonacci from two down ranges here, sitting into the yellow zone. Again, clearly finding resistance. As long as it stays within or underneath there, I believe that’s a selling opportunity today. If it breaks above there, then of course we’ll likely look for this to begin pressuring higher. Could be back up here, even to this blue-shaded area, which I’m going to try and select and drag over a little bit further. That becomes our next potential resistance on the breakout above this yellow-shaded area.
Clearly, at this point, if you’re selling, you’re looking for the breakdown of the pink-shaded area and a continuation of the downtrend. We could even see this down towards the upper-0.8100s, the green-shaded area at the bottom of the chart. We have found some support into the pink zone. If this becomes a reversal point, which it hasn’t really shown signs of reversal yet, but if it becomes a reversal point and we see changes in the pattern of the trend, which, again, would be higher highs and higher lows, we’re likely looking for the breakout above that yellow zone if that’s going to be the case here for the AUDUSD.
Take it on down to the 4-Hour Chart. Let me zoom it out before I do that. Take it on down to the 4-Hour Chart. There’s our resistance from yesterday. You can even see the sell order sitting there still. Let me see if I can move that. You see the red, dashed line there. That’s our stop loss from yesterday’s trade and the sell order that was at the bottom of the yellow zone. Again, I believe that that will, again, be, today, resistance. A breakout above there probably looks for another turn higher for the AUDUSD. Under the pink zone is really what we’re looking for, for a continuation of the downtrend.
Take a look at the Forex Black Book trend bar. It is red. Of course that’s signifying that we have a bearish or downtrend bias. If we’re looking for a new signal for the Forex Black Book, it’s likely looking for it to rally higher first. Give us a red or yellow bearish arrow. You could see a yellow arrow here. It’s kind of hard to see inside the yellow-shaded area, but there is a yellow arrow there. Again, we’re likely looking for another either yellow arrow – you see a couple up here, before it started moving down again – or a red arrow.
I don’t know if we’re going to see a red arrow. I think it probably needs to go up much further, maybe even back up here to the blue-shaded area before we see a real opportunity to see a new red arrow, but selling on rallies into resistance still maintain the focus here, in the direction of the trend, until, I think unless it breaks above the yellow zone. If it does that, then we may begin to focus our efforts back up again for the AUDUSD, but for the time being, selling, yellow zone. That would be back to 0.8360, 0.8365, 0.8370. As long as it stays under 0.8400. That would be the risk in this scenario; is that it breaks above 0.8400 on any sells.
If you happened to buy the pink zone, let’s go back in that direction. If you happened to buy, looking for reversal from the pink-shaded area, I definitely would begin protecting profit the closer it gets to the blue trend line, the yellow-shaded area, because that will likely be intraday resistance as it was yesterday for the AUDUSD
