AUDUSD tests London low

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The AUDUSD took out the London morning low at 0.9964 but just barely (low reached 0.9962).  The price has bounced up a bit – trading at 0.9971 currently. The 100 bar MA on the 5 minute chart is at 0.9984 and will be eyed as the first upside target should the double bottom, indeed be the bottom for the pair for now.  

Taking a look at the hourly chart (see below), the price has some cause for pause at the 0.9952 area .  This is a channel support line.  Below that the is a steeper channel support line at the 0.9932 level. 

With global economic concerns increasing as a result of Greece, Spain, etc, the movement out of risk continues. Commodities, like copper, which tend to correlate with the AUDUSD is also moving lower and is at its lowest level since mid January. This is contributing to the AUDUSD woes.

5 Comments

  1. Greg,

    Some traders go long at support level thinking that it has reason to bounce at that level.

    I have seen supports/resistance levels are broken on days. Mostly when sentiment is very bullish or very bearish.

    Yes, generally we can expect a bounce at support for the first time, but second push could break it.

    We have talked many levels in eurusd and all have been broken until now. This is an example.

    Your views on trading based on support/resistance levels ? I would take these levels for exit in my opinion.

  2. Hopefully traders are taking profit at the support (trend is down) and if buying, buying/going long, they do it with a tight stop. Trends are fast and directional and tend to have large ranges so you don’t want to mess with them if the price breaks support. The trend is down for the AUDUSD but at key support areas there does tend to be profit taking. Watching the 100 bar MA and retracements for clues as to the sellers continued conviction. If that correction area holds, the buyers are simply anxious profit takers looking to book some profits. Those buyers, may be selling against the 200 bar MA or 50% of the move down today (both at 0.9996 currently. If the low is taken out, be careful being long…

  3. Yes, Greg. Trends are fast and directional. Your teaching rings my mind.

    I did go long at supports but failed and took a small loss whenever I tried long. Of course not in audusd but in eurusd.

    Yesterday after asia open I tried a small long in audusd and that was the only profitable long. All other profits were made only in shorts and all were entered after retracements.

    Now no short/long. Just looking for a right entry.

    Thanks Greg.

  4. In a downtrend…look above for your trades and below for profit at key levels. Then keep the confidence and get back in against key correction targets. If they hold, the trend may indeed continue…..

  5. Thanks for your work here Greg!

    Well for what is worth – going long right now is for me a NO GO!

    The trade is down for AUDUSD – clearly down so I would never go long.

    As a matter of fact, I was short this morning and just got out with a huge profits: enough for today ;-)!.

    I still do NOT and will never have the guts to go long on a down trend. For me, it is KISS – I short when the trend is down; the key being when to go short: this is the key for success (I believe)

    Good luck and keep it up!
    A

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