Hi, 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 take a look at AUD/USD. We expect the price to continue to drop to the downside. We looked for a short position going into today but the market triggered our position and is currently in profit, which is nice. The reason why I wanted to look for the short in the first place was the strength and weakness table.
So if I bring that in, we can see that the AU Dollar was one of the weakest currencies last week – losing three places amongst all the other currency pairs and the US Dollar is still at an extreme level.
I still want to be looking for that potential US Dollar buying opportunity.
What we saw was the US Dollar index formed a false breakout, which we can see, here on Aussie, and you can see a bit more clearly on Euro.
If we go to the Euro, you can see that this is the complete opposite of the US Dollar index. The market came up into this high and gave us a breakout, false breakout, because the market then closed lower.
Then we saw that on AUD/USD as well. We looked left, and we can see that the market tried to break to the upside with this candlestick here. Failed in the next day – it was rallying up quite nicely and then just completely flipped and closed bearish, even as a bearish engulfing candle as well, which is great. So, I want to be on the short side of AUD/USD, just to have a little look at some technical as well. The price is making higher highs, the RSI is making lower highs, so we have a divergence between the price and the indicator, which also adds a little bit of confluence to the move. So, I’m expecting further downside from Aussie. Targets are going to be that 0.7 level because that is a huge level on AUD/USD. I like the fact the market has trended up for so long, and we could be starting to see a little bit of a breakout now and, potentially, a downtrend forming if that US Dollar strength does start to kick in like we’ve seen it is, currently.
So, Aussie is looking good. And if we’re looking at it from an intraday point of view, you could look for some four-hour pullbacks and try to trade the four-hour trend at the moment. That trend is still largely to the upside, and so we need to see some lower highs lower lows, coming into here. But this is looking good, and it goes well with our AUD/CAD short as well.
We looked at the break below this daily candlestick low that’s moving nicely as well.
We’re focusing now on that Aussie weakness this week along with Kiwi’s weakness.
Unfortunately for us, NZD/JPY got stopped out here, and look at that: today just completely rolled over. So, if you did manage to continue to look for that short, then that was a brilliant market to look at as well.
So, I really like the CAD strength against a couple of currencies. That’s why we looked at AUD/CAD.
But really, AUD/USD could be the start of a decent decline.
If we take a look at the weekly timeframe and see how it’s shaping up – lots of candlestick wicks just through here. There is no real higher high closes, had a bit of indecision last week. Now, we’re getting that fake-out pattern, which does usually lead to some further downsides, and we can see we’re targeting that 0.7 area because of that recent structure area of resistance.
So, we’re expecting the price to drop a little bit further. We’re going to have to look for some intraday moves as well on this and, hopefully, we can get other positions in.
But AUD/USD is looking good to the downside.
Thanks for watching this video update, and I’ll catch you in the next one.
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