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 February 8, 2018. Today we’re going to take a look at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis.
Now, over the past several days, we’ve seen a little bit of a shift in the trend. Obviously the market was in an uptrend for this currency pair. You could see the black trend line rising from all the way down here near the 0.7500-level all the way up into the 0.8100s. In recent days, again, we’ve seen a change of direction. The market broke that black trend line. Got underneath the trend line. Underneath the 0.8025-level, the blue-shaded area up here at the very top of the chart.
Broke the pattern of the trend. The pattern of the trend are these boxes where it went into congestion, breakout, congestion, breakout all the way up to the green box at the top. And again, the difference is it broke that pattern, getting under the black trend line, the green box, the blue-shaded area, and has been falling ever since. So, we’ve had a shift in the direction of the trend. Pretty significant trend truthfully.
Now we’re challenging down here into the 0.7800-level. The pink-shaded area right in the middle of the chart. And I can easily say right in the middle of the previous trend because if you take Fibonacci from the low of the black trend line all the way at the bottom of the chart to the highest high of that trend, you find the 50 percent retracement level sitting at 0.7818. That’s the top of the pink-shaded area that we’re looking at. It’s 0.7820.
So, again, 0.7820, 0.7800, the pink zone. Follow it back in time. You could see the blue box right here. Support on the way up within the trend. You go back here, where the blue circle is. Just ahead of that was support and then it broke it and went down to the green zone. That’s important for our future. And then back here, where the black circle is, support again at the pink-shaded area.
So, again, important for our future is what’s going to happen around this pink-shaded area. History tells us black circle. If it finds support at this pink zone, we’d look for reversal for it to go back up, just like what happened at the black circle on the left-hand side. Secondly, if it breaks through it, blue circle, we look for the market to continue to go down. Now, we do, just underneath here, have the 100-period simple moving average for the daily timeframe, but it’s right in the middle, so I think we have plenty of room to go and even a spike underneath there wouldn’t be out of the question.
Look at back here at the blue circle. Again, spiked all the way to the green zone underneath the 100-period moving average. So, I still think there’s a possibility if we can get some momentum underneath the 0.7800-level, the pink-shaded area, that we continue to fall down to, by the way, the next Fibonacci retracement level of the black trend. The .618 sits down here at 0.7743, the green-shaded area.
So, what we’re looking for is evidence of a breakout underneath 0.7800 to target down here into the mid to low-0.7700s, the green-shaded area for the AUDUSD. Let’s go ahead and take it on down to the four-hour timeframe. And as we could see, here’s the pattern within the trend, and let’s just get a couple of circles here. We see the breakout, the retest of the pink zone and a continuation.
Let’s go up here all the way at the blue zone. By the way, we took a short at the blue zone up here and you could see the breakout, retest. Even here, right here at the orange zone, we see a breakout, retest. So, what does that tell us about what we’re going to look for underneath the pink zone? We’re going to look for a breakout. Maybe even a retest down here under the pink-shaded area for a continuation down to the green zone.
So, we wait for the opportunity. We wait for the setup. We don’t want to assume because this could end up being a false breakout. We don’t want to fall prey to a false breakout. If it gets underneath here, everybody takes a short and then suddenly turns back above the pink zone, then that becomes a false breakout and everybody is unhappy about it. We want a real deal breakout underneath this pink zone, 0.7800, before we take the shorts. We’ll watch for the setup. We’ll discuss that more in the live Trade Room today for the AUDUSD.
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.