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 August 10, 2017. Today we’re going to be taking a look at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis.
We’re getting started here on the daily timeframe, and probably the key component of today’s analysis will be the orange-shaded area at the very top of the chart. The orange zone is 0.7930 down to 0.7895, and probably the most important part about that is the fact that today’s daily candle is the first candle in quite some time that has now broken back underneath there and opened back underneath the 0.7900-level.
Let’s go ahead and do one thing before I zoom in. I’m going to take a Fibonacci measurement from the lowest low that we see down here at the bottom of the blue trend line, bottom of the chart, to our current resistance high. And that’s going to be interesting as well because as you look at that Fibonacci measurement, the .236 Fibonacci retracement level is sitting at 0.7890. Well, guess what. We’re now underneath that as well, underneath the .236. If that plays out as you might expect, the .382 becomes your next target for the Fibonacci retracement, and that lives all the way down here closer towards the yellow-shaded area and into the 0.7800-level.
So, the fact is we have pushed through 0.7900. We’ve pushed through the orange-shaded area, which was historical support. You’ll see that here in a minute. And now there’s potential that we see a further retracement to the Fibonacci level, .382. The blue trend line there is there also to just give us a clue what the trend has been, but also could become another support target on the way back down if the market continues to pressure lower as it is for the past couple of days. And again, when we talk about the past week and a half or so, it has been clearly bearish here for this currency pair and it has indeed broken under it.
Take a look back here. Six days or so as it pushed through the top of the orange zone, sat down on top of the orange zone for five or six days as support. So, we know that historical support could also help us identify this area as a resistance. So, we’ve already outlined a number of reasons to think about 0.7900, the orange-shaded area as being resistance. It was support. Now it’s going to act as resistance. We see the green trend line, short-term trend line. That’s going to act as resistance. The .236 Fibonacci retracement level or underneath there, that’s going to act as resistance.
There’s multiple indications here that 0.7900 and even the double zero level, 0.7900, can act as a psychological barrier of resistance. So, for me, as long as it stays underneath all of those components of resistance, I’m looking for it to continue this short trend that we see right here and target back down to the .382 and the yellow zone and the blue trend line. The risk is pretty simple. The risk in all of that scenario is that the market changes its mind, breaks back above 0.7900, 0.7930, the orange zone, the Fibonacci, the green trend line, and starts to work its way back in the direction of the previous trend and push back to the resistance high.
Let’s go ahead and take it down to the four-hour timeframe. And as we get down here, it doesn’t really change it, does it? Take a look. The past day and a half or so just holding underneath that orange zone. Look back to the left. Again, back here on the left, we see those false breakouts. We’ve talked about these false breakouts in the Trade Room for the past couple of days. Over here, where I’m putting this black circle, the two times it pushed underneath the orange-shaded area, no open and close, no real deal breakout underneath the orange zone, and then it turned back around and went back up. The difference is now we are clearly underneath that orange-shaded area, 0.7900, the .236 fib.
So, for the day today, as long as it stays underneath here, I think we have this higher expectation. Not a guarantee of course at any time of trading, but a higher expectation that we look for a continuation of the pattern of the trend. What’s the pattern of the trend? Well, you could see these little short rises underneath the green trend line. These short rises, where it goes into congestion or has a little bit of a short rise. Well, I would say even this right here is a little bit of a short rise back into the resistance and into that congestion. So, that’s been the pattern of the trend. Let’s look for a continuation of that until something changes in the market to cause it to turn back higher, and looking to focus short underneath 0.7900 for the AUDUSD today.
From Forex Traders Daily, this has been your daily analysis with Ross Mullins. 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.