Transcript of Video
From Forex Traders Daily, this is your daily analysis with Ross Mullins, live from Richmond, Virginia.
Hello everyone, this is today’s video analysis for January 9, 2018. Today we’re going to be taking a look at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis.
Now, we have a couple of trends here that we’re speaking about on the AUDUSD daily timeframe. First off, the blue trend line was a clear downtrend for the currency pair, pressuring all the way from the 0.8100s all the way down here towards the 0.7500-level. And in the past couple of weeks though, we’ve seen a pretty nice rebound for the AUDUSD as it’s pressured back from the 0.7500-level all the way back now into the 0.7800s.
Finding some congestion up here between 0.7825, 0.7880. You could see the yellow and the orange-shaded area. Follow it back in time. The yellow zone first, 0.7825, 0.7800. All the way back in time you see the blue circle, bottom of the blue circle. Support. Green circle. Support. Black circle left-hand side of the chart. Support. So, we know historically – this is fact – that as long as it’s above the yellow-shaded area, we would be looking for support.
Only if it gets underneath it do we look for it to go lower. Not too hard to see just above that into the orange-shaded area, 0.7880. We have seen historical resistance before as well. Again, blue circle. Green circle. Well, just above the green circle. We see resistance near the 0.7880 or into the 0.7500-level. You can even see some support here around the orange zone in history as well. So, that is 0.7880 up to 0.7905.
So, clearly this is the area that we want to focus our attention on. I’ve taken Fibonacci from the highest high of the blue trend line to the lowest low and the lowest low to the current resistance high. We see the 50 percent of the downtrend sitting here at the yellow zone. We see the .236 of the uptrend sitting just underneath it. We also see the 100-period simple moving average sitting underneath the yellow zone today.
So, the yellow zone. Fibonacci, trend line, moving average, historical support – all lining up to tell us that this yellow zone is going to be a significant support barrier or support zone for the AUDUSD. As long as it’s above it, the potential is a continuation of the uptrend towards of course, first, the orange zone, but if it gets above the orange zone, we would look for it to go higher. And the risk in this scenario is that the market changes, it pressures underneath the yellow zone, 0.7800 again, and starts working its way back down.
Of course part of that will be the strength or weakness of the AUDUSD, and we’ve seen gold on the rise over the past several weeks as well, giving us some strength to the AUD, but we’ve also got to keep in mind that the AUD has shown some strength over the past couple of days. Well, since the beginning of the year as well on other currency pairs. So, we have to keep that in mind, but at least for now, I believe as long as it stays within and above the yellow zone, we don’t really want to go short on top of that yellow zone, but more likely looking for a bounce on support.
Let’s zoom it in a little bit and, again, there it is right there. So, if you’re going to look for a buy or long shot, 0.7825, 0.7820, into the yellow zone gives you your best risk-reward. You’re looking for stop loss probably somewhere down here around the 0.7780, 0.7775 or so level. So, again, not too bad on the stop loss if you can get it into that area there just underneath the Fibonacci levels and the support zone because, again, you just don’t want it to break that yellow-shaded area. And of course your target: the orange zone or higher, getting above 0.7900. Could even see it pressure even higher for the AUDUSD.
Again, not really looking for the short side unless it breaks underneath the yellow zone. Then potential shorts. One last thing here. We see the Forex Black Book being green. That gives us a little bit of an upside expectation as well for the AUDUSD today.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.