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 12, 2018. Today we’re going to be taking a look at the Australian versus the US Dollar [AUDUSD] for today’s trade analysis. It’s important for me to recognize the fact that in about 35 minutes from the recording of this video, we do have some US data coming up at 8:30 Eastern US time. CPI retail sales hitting the wire. Definitely want to pay attention to that news. If it’s positive or negative for the USD, we could see that impact the market and the analysis that I’m providing today.
As you look here at the daily timeframe for the AUDUSD, we have been challenging resistance highs. The market clearly has been in a rise here along the black trend line for the past several weeks, going from all the way down here at the 0.7500-level up pretty much the 0.7900-level as it’s capped out its resistance highs.
We’re challenging resistance right now. Take a look at the orange zone between 0.7870 and 0.7885. Follow it back in time. The blue circle. You see resistance. Unable to break above the orange zone at the blue circle and turn back lower as it was pressuring higher into there. Not too far before that you see that as well.
Go back a little bit further. You see support at the black circle. Orange zone. Green circle. Orange zone. So, we know historically we have seen trading action around this orange-shaded area, 0.7870, 0.7885. Sometimes, when the market is above it, it becomes support. The market bounces back higher. Sometimes, when the market is below it, it becomes resistance and the market goes back down. And that’s what historically has happened. It’s fact. It’s nothing we can change about the market.
Even in recent times, zooming it in one time, you could see the market finding resistance here at the orange zone, 0.7870, 0.7885. Over the past week, week and a half or so, challenging that resistance. Bouncing back down to the yellow zone and making another run at the orange zone. Today we see it challenging there again. It did open of course above here, but hasn’t closed. Of course today hasn’t closed, but definitely want to watch this.
If the market is able to push back under the orange zone, well, what’s going to take that is positive data for the US. If we get a good, solid, positive CPI or retail sales data, this could take a turn back down towards the yellow-shaded area, back underneath 0.7870. If we get negative news for the US, which we have seen the USD selling off in recent days, having a really tough time, especially when you go over the pairs like the USDCHF or the EURUSD or the GBPUSD. You see the USD sell off and even the USDJPY recognizing the USD sell off.
If that continues with negative data out of the US, we’ll likely look for the break of 0.7885, the orange-shaded area and the continuation higher for the AUDUSD. So, we need to see what the news is going to do today before we can have confidence in direction. One, it’s either going to break above, go the next resistance high, which is up here closer to 0.7845, the pink-shaded area, or if it’s positive news, maybe we see the market dip back down to the yellow zone. And of course ever a break of the black trend line, the yellow zone, we’d look for the market to begin maybe a downtrend if it’s significantly positive.
But I still am focused on the buy side here for this currency pair. The market has been in more bearish sentiment for the USD. The AUD has been doing pretty well. And we’ve also seen gold breaking and making new highs over the past 24 hours as well, which leads us to believe this currency pair could break higher as well.
Take it down to the four-hour timeframe. A little bit difficult to see a buy scenario with this fall that we’ve seen, but I do think that there is a possibility, as long as it stays within and above this orange-shaded area, 0.7870, 0.7885, and we get negative news from the US, that this becomes a potential buy scenario, long scenario 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.