Hi guys, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to look at AUD/CAD in a little bit more detail, this is the chart of the week for me, as well as NZD/JPY, due to the strength and weakness analysis.
So, the strength and weakness analysis showed us that the AU Dollar was losing value, and the CA Dollar was gaining quite a bit of strength, which has led to this bearish weekly candlestick. Now the prices are at a huge resistance zone, which is our first sign that the price could push to the downside. Then what I like to wait for when the price hits this zone is that bearish week, because that is suggesting to us now that the market might retrace. If it’s going to retrace, where do we likely see the market retracing to? That’s previous structure highs, which is just down, at this level here, around that 9350 of these structure points, over there. So if that’s the case, I’m expecting the price to downtrend towards that point.
So if you go to the daily time frame, what I’m expecting is for the price to make lower lows and lower highs to that point, here, when then the weekly trend might continue. But at the moment, the weekly is very bullish. We can see that, but it’s at this resistance level, which means that we could see a weekly retracement phase.
Imagine that the weekly is one long like this: within that, you’ll get a daily trend to the downside, and within that, you’ll get a four-hour trend, and within that, you’ll get the 15-minute trend – it’s a trend within a trend.
That’s what we’re looking to do here: we’re looking for the market to trend down, here, and we can see the price is currently reached retesting this little bit of structure, here.
Now what I want to see is that confirmed daily close, and the reason why I wait for a daily bearish close is so that I don’t get caught on the wrong side of the move too soon. What a lot of people might do, here and around there, is start selling in, which is great because it may pay off. But, if there’s no actual change in cycle, what we could see is at complete overturn and for it to push to the upside.
I don’t want that. I want the price to confirm to me that it is going to find resistance around this area, and one way it does that is by forming a daily bearish close. Once I see that daily bearish close, the next step for me is to look at that four-hour trend.
So, I want to dive into that four-hour and have a look at the trend. At the moment, the market is in that pullback phase and the daily. So we’ve got a slight move to the upside, here; we can see that’s going a higher high. Now, that’s not what I want to see. I want to see the market lower lows and lower high. So what I need to wait for, here, is for the market to make that low. So, it’s either going to break this low, here, and it’s going to trend back to the downside, or it’s going to continue up and then break to the downside. So I really need this four-hour to start trending, in order to take a position here.
So let’s just look at this early example, when the market does start trending lower, which is just this little section in here, where we’ve got this market rallying up. It comes down, it breaks into new lows, this section, here, and this section, here, is where I want to be executing trades because those are the impulse moves on the lower time frame.
So I want to be looking at my 15-minute at those points looking for executions, and you can see, if I’m trading off the averages on a 15-minute time frame in those phases, I’m going to have a really trading week or trading day because of the look at these big moves, through here – that’s what I’m trying to capture.
I can’t capture that, there, because it’s against my bias. I want to be looking for the daily close first to be bearish.
I want to wait for that four-hour trend to line up because I know that if I get that four-hour, I could potentially get an impulse, like here and here, which I can take advantage of on a lower time frame.
So keep an eye on AUD/CAD. Wait for the daily bearish close and wait for the four-hour change in trend, then look to execute for some positions.
Thanks for watching. See you soon.
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