AUD USD Analysis: By Popular Demand!

AUD USD Analysis: By Popular Demand!

It hasn’t gone unnoticed by some that I’ve never posted an AUD:USD analysis.

There are some reasons for this, the main one being that I have a bet that AUD:USD will make all time new high’s in 2012. The year started great and just a few Week’s ago AUD:USD was within 300 pips of delivering my winnings, but the recent correction has concerned me a little.

So there we have it, I have an agenda and ultimately a bias surrounding AUD:USD and for that reason I’ve not made any great efforts to analyse it this year. Due to a few requests to chart it in detail, and in order to instil fear into the counter-party of my bet in the hope that he gives me the prize early, I’m going to take a closer look, but be warned, I’ll only be looking at the bullish potential!

First off is the Hourly chart showing a potentially bullish falling wedge having been back tested by today’s sell off. In fact, although price action and MACD isn’t confirming it, this re-test of the falling wedge looks very attractive as an entry for a risky long. I wasn’t expecting to see anything like this when I first opened the chart:

Moving on to the 4 hourly time frame and again we have a sequence of lower highs and lower lows, but what I found particularly interesting is that the horizontal line at 1.0475 was placed on this chart back in May 2011 as my system had calculated that level as future support/resistance to trigger trade entries and by pure coincidence that is exactly where price lies as I type. It would be truly fascinating to see if the price can still remember support at this level after all this time. Note that this support is only on the 4 hourly time frame meaning that from my system’s point of view any trade targets or stop losses must also be based on this time frame. Beware that MACD is rolling over and on it’s own does not support a long entry from here.

Finally the Weekly Time frame. To be honest, there isn’t much I can say about this, it doesn’t look particularly bearish or bullish and I could quite easily see price moving in either direction from here, again noting that MACD is rolling over. If already in a long term swing trade, then one could possibly use some of the lines on this chart as a guide to stop loss placement or target areas.

The combination of the (blue) 20 MA lining up with possible support at 1.0381 and also the up trend line offers a good level to watch if you are already in a swing long position, or alternatively as a low risk long entry were price to reach these levels:

So there’s my current thoughts on AUD:USD and I leave you to decide whether we’ve got any trade-able set-ups amongst the various time frames. I’ll probably stay flat for now, but if that hourly falling wedge back-test offers support I could be persuaded into taking a long entry.

Of course, we’ll be seeing new highs at some point this year!


  • Razor Swing Trader
    Posted at 01:36h, 21 March

    The Aussie is weak at the moment with the slowing down of China. There are many talking about China being the next GFC as its lending is all over the shop and greater in magnitude than USA. With the US looking stronger and China weaker its going to be hard for a new high.

  • RS2OOO
    Posted at 01:52h, 21 March

    When entering the bet for an all time new high, AUD:USD was at 1.0200 area and we saw a 650 point rally from there, although we’ve since sold off a bit.

    To see a new high this year, the levels detailed in that Weekly chart need to hold.

    In the short term, it wouldn’t suprise me if we see a rally from the levels detailed above at least to go up and test the 4 hourly 200 MA from the underside.

  • Razor Swing Trader
    Posted at 02:17h, 21 March

    Of course anything is possible in the land of Harry Potter….

  • RS2OOO
    Posted at 18:20h, 21 March

    …Saying that, Pimco calling AUD/USD to 0.9000 by year end.

    Also bearish on GBP and EUR, very bullish on Dollar.

  • Pingback:This Week's Swing Trading Round Up; 23rd March 2012
    Posted at 21:15h, 23 March

    […] the fact there were no new swing set-ups worthy of talking about.Earlier in the Week I talked about AUD:USD and CHF:JPY as potential swing long set-ups, but neither of them played out so no positions were […]