Trading opportunities for currency pair: going against a bear trend. Wave “B†on the weekly is forming as a triangle. It could trade between 0.7100 and 0.7370 until the end of the year. As soon as wave B forms wave “eâ€, look to open long positions with small protective stops under 0.7016 and with a 0.7620 target. A closing of the daily candle below 0.7016 will cancel the triangle and any growth scenario.
Background
The last idea I made on the Aussie came out on 23rd November. When it was published, the Australian stood at 0.7236 against the Yankee. In the idea I recommended taking a wait and see stance for two days so as to check whether there really would be a break in the trend line which the bulls had broken on 20th November.
On that Monday (23rd November) the AUD/USD dropped to 0.7158, but over the next six days it couldn’t manage to close below 0.7190. For me this was a controlling price level for checking the existence of a break. The break was confirmed. On 30th November a new bullish impulse was borne which hit 0.7384. With a close of the daily candle above 0.7296, any fall became invalid.
When there was a shift upwards, the buyers met a strong resistance which had formed from the 0.7439 (11th August) and 0.7381 (12th October) maximums. The AUD/USD didn’t make it to the targeted 0.7420/36 region (the zone from the previous review). Due to a fall in oil and iron ore prices, the price returned to 0.7096.
Current Situation
I didn’t just choose this currency pair for no reason. Take a look at the daily graph. The AUD/USD has renewed from a 0.7096 minimum to 0.7272 after a price stabilization of oil and iron ore prices.
Futures for ore with a 62% iron content closed at $39.08 on Thursday. The price has been at that level since 10th December, 2015. Oil has jumped from a $35.98 per barrel minimum due to a significant fall in US oil reserves. Brent costs $37.89. The financial markets were closed on Friday due to it being Christmas.
