Trade view /
29 September 2016 at 7:48 GMT
USD Index – We deploy a system that is mainly trend following. The current market conditions are neither good for the mind nor the wallet. The USD continues to hold within the large bullish ascending triangle. We expect a final breakout to the upside but, in the meantime, expect mixed and volatile trading to continue.
Source: Saxo Bank
The AUDUSD looks prime for a move to the downside but there is scope for a reversal formation to build before we see sustained losses.
Monthly – Like most USD pairs, we have seen a long period of consolidation (13 months). We are in an expanding wedge formation that has an eventual bias to break to the downside.
Weekly – Elliott wave dictates that the 4th wave correction should now be complete at the 38.2% pullback level of 0.7849. However, until we see a break of the base of the bullish channel at 0.7450, this will not be confirmed.
Daily – Highlights a consolidating triangle formation within the channel. Three points of note here:
1. We are rejecting the triangle top
2. We have a DeMark correction count 9 on the daily chart
3. The 6-hour chart could post an Evening Star formation.
An AB=CD formation would take the pair to 0.7080
Intraday (one-hour) – Forming an Ending Wedge pattern. A break of 0.7657 is needed to confirm the breakout. However, with 0.7643 being pivotal (support and resistance) since the 21st September, we could ‘bounce’ higher from this support and then make a bearish Head and Shoulders formation. Far too early to tell.
Watching price action today and will look to sell at 0.7685 IF the pattern looks likely to compete. The lack of direction in the USD is likely to continue. Maybe Fed chief Janet Yellen will give us some direction tonight, but I wouldn’t bank on it!
Management and risk description
On a move through 0.7600, we adjust stop to entry
Selling close to 0.7685
0.7450 (channel base) and 0.7080 (AB=CD)
— Edited by Clare MacCarthy
Non-independent investment research disclaimer applies. Read more