Early trades confirmed with break-out movement

Earlier this week, I took four trades – AUDUSD long, NZDUSD long, USDJPY short, and USDCAD short. I previously mentioned the correlation between the EURUSD and AUDUSD pairs. Unfortunately, I was not able to optimize a long entry over on the EURUSD pair.

AUDUSD: Long entry off daily and hourly levels

AUDUSD01

I entered this trade mainly just on the hourly level as indicated by the solid horizontal line. It’s not a perfect level, but I pegged it as a relative low so I aimed to enter as close to that level as possible in order to capture a high probability turning point (bullish) without waiting for confirmation.

AUDUSD02

This second image is a zoomed-in image of the daily time-frame. Two key candles to look out for, which are the current candle and the one day ago candle. The one day ago candle is an inside bar, which signals indecision and trading in previous few days range. The current candle breaks out of the previous candle signalling the expectation for another further bullish wave.

As I’m making this post, I am currently waiting for the RBA Rate Statement release due in two and a half hours.

USDJPY: Entering short on retracement

I took this trade just as a continuation of the downward U.S. Dollar pressure. I’m just in it to ride this wave as USDJPY sells off with all other pairs where the USD acts as the base currency.

As annotated in my chart, the first level tested was the daily level as indicated by the dashed line. The second level is just an arbitrary hourly level that price seems to be attracted to it, but produced a a longer upper candle tail. To me, this signals there is short term upticks, but overall there is selling pressure preventing this pair from breaking higher. After seeing this most recent price stall, I expect this pair to make another leg lower in the hours to come especially during the ISM Manufacturing PMI release.

USDCAD: Bull and bear bars side by side

USDCAD01

Similar to all other U.S. Dollar pairs, I expected USDCAD to continue to remain bearish. I entered this trade after seeing the bullish candle immediately followed by the bearish candle. Any gains were immediately returned the following day. On the day after, I shorted into that bullish candle hoping it is a retracement. I plan on holding this trade open for now given that the current daily candle is not exerting any significant bullish pressure.

NZDUSD: Longer lower tails indicates exhausting of selling pressure

Aside from the current candle, the previous two candles both display the longer lower tails signalling that price has traded lower and closed higher. Combine this with the break through the daily level as indicated by the dashed line, I also remain bullish on this pair. Similar to the AUDUSD pair, NZDUSD also broke above a key weekly level as show below.

If this weekly level holds up, the next price target would be at the 0.77~ level where we would expect to see any form of resistance.

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