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AUDCAD hits T2 and then reverses LONG

Market Analysis

AUDCAD, Daily                 

I last wrote on the AUDCAD “The AUDCAD also rolled over and displayed some classic bearish patterns. The Tweezer Top and Fractal high  Monday and Tuesday was followed by three strong down candles (3 Black Crows) the confirmation SHORT entry was on the close of last night’s candle at 1.0180 as the key 20 Day moving average was broken.  The 23.6 Fibonacci level could provide some resistance to the move down to target 1 at 1.0080 (100 pips and the 50 day moving average). Target 2 is more ambitious, beyond the lower Bollinger band and at the psychological 1.0000 level. The pair was last below the 20 day moving average in January, so this could be a significant break if it is maintained. The position is against the longer term monthly up trend. The Parabolic SAR turned negative yesterday, the RSI at 51 is neutral but falling and MACD remains negative”. 

Both these targets have been achieved and the trade netted 180 pips.

The very strong reversal on Thursday (April 13) from the 200 DMA and engulfing the three previous day’s moves reversed the position and prompted a LONG position at 1.0090 today.  The parabolic SAR has also reversed. The 20 and 50 DMA may prove resistance to the move back to Target 1 at 1.0180 (14 DATR and 61.8 Fibonacci retracement level).  Target 2 is the next resistance higher at the recent Fractal High at 1.0265.  This long position is with the longer term Monthly trend but the weekly trend remains neutral. A break of the 200 DMA at 1.000 zone would negate this position.

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Stuart Cowell

Senior Market Analyst

HotForex

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