Having closed the previous EUR:AUD swing short for a quick profit the time has come to take another look whilst price continues to struggle against Daily resistance.
The MACD negative divergence has now confirmed itself and price breaks above the 1.4270 level appear to attract selling pressure. I was so close to entering short last night but at that time price was above 1.4270 and looking lively so the decision was made to wait until today. Price did drift lower overnight and my entry wasn't at the best possible levels but it turned out to be good enough.
EUR:AUD has had some interesting moves over the last couple of Years, some of which were technically quite simple to catch and resulted in significant moves.
The Daily chart below shows historic analysis that I applied to the chart before trading it and you can see that 4 horizontal lines and 2 vertical lines was all it took!
To explain further you can see that between October 2010 and December 2011 price remained range bound in the top left of the chart. When it eventually broke down from this range I made the decision not to trade it until price retested the range. After quite a long wait the re-test came in May 2012 as defined by the first red circle. I call such set-ups "Box Trades" simply because price has retested the annotated box that previously contained price before it broke down.
Another quiet Week where I found it difficult to spot any high probability set-ups although there were and still are a few I keep going back to.
The AUD:NZD swing long was stopped out on Wednesday for a 180 pip loss. Within hours I became convinced it was going to rebound having taken mine and probably many other stop losses at the max-pain threshold, so I've actually re-entered the trade from 1.1895 and the trade goes into the Weekend showing a 158 pip profit. Defining an upside target is a little tough because its still hard to tell whether this is just a retrace within an ongoing down trend or whether a larger scale reversal is taking place. For now I'd probably guess at the former so the key here is to watch the moving averages for signs of them offering support or resistance and also for signs of them turning up.
On scanning through the charts last night shortly after futures opened I selected a number of potential Swing Trade candidates worthy of further analysis. My thoughts, as posted on the ADVFN forum were as follows:
AUD:CAD - Potential Swing short
GBP:USD - Swing Long, but not yet, see Weekly chart
USD:CHF - Possible falling wedge, confirmation should come quickly
AUD:CHF - At support ready for Swing Long
GBP:CHF - A speculative Swing long if it finds support as it's still not hit my upside target set early last Year
CAD:JPY - Maybe a short, but no confirmation yet and my fib levels are a bit hit and miss, but keeping an eye on it.
EUR:AUD - For a short term trade on the short side if we can get an hourly close below current support - which is where price is right now (23:00 1st Jan), doubled up with the hourly 200 MA. If both of these fail to support price, should see more downside.
It would be fair to say that the last couple of Months have offered really tough conditions for swing trading, particularly because the day to day chop seen on many markets have made the line between overbought and oversold conditions quite difficult to define due to flat-lining indicators.
AUD:CADremains one of the few pairs I'm still watching. Having misplaced the stop loss on the previous swing short attempt I'm keeping an eye on it for a new short entry on confirmation of a lower high.
Most time frames offer the same story and I've gone for the 4 hourly here as it compresses the data quite well. If the planned swing short is to remain a valid proposal then I'd like to see