Today, we pretty much spent most of the day nit-picking at the AUDUSD pair on the 5-minute timeframe. This exercise was more a pretext to introduce ourselves and show what type of mindset we use to consider trades. It was done at such a small timeframe, because this afforded us a forward-moving price action over which we could explicate the concepts of momental channels, their interplay, and how to use them to define the major trend, assess the strength of the underlying trend, and also help define probable levels of price reversal.
To recapitulate quickly, here is how the concept was introduced:
EURCAD - General introduction to channel:
"Kiss of Death" - Intro to an advanced pattern:
AUDUSD/M5: Channel Interplay applied:
EURCAD/H4: Getting Deeper Into 4xQuad Concepts:
AUDUSD/M5: Getting Closer to Momental Channels:
AUDUSD/H4: Breakout & Support ... Taking A Step Back:
The charts above have been listed in chronological orders. However, TradingView has this very cool option to jump forward from the moment the chart was created and observe the ensuing price action. Each of the charts will allow this forward action.
Now off to the chart at hand, which is NOT a timeframe we can handle with a single trade, but one view we like to dangle our heads from, as if at the top of the Eiffel tower, hair in the fresh Parisian wind with a coffee in one hand and the passion of my life in the other ... just imagine a hand clinching to a bunched up wad of charts.
What we would like to do here is to peel our mind off of the occult geometries and return to earth with basic technical observations:
1 - The recent price action in AUDUSD completed a classic at Point-D.
2 - Point-D offered a rallying base for now two candles, the second of which represents today's action
3 - Overhead resistance levels defined at 0.88905, 0.93849 and a potential termination level at 0.96333 represent structurally definable level of anticipated resistance, the latter of which is independently defined by our own predictive analysis and forecasting methodology.
What we find interesting is the proximity of the potential 0.96333 target to 0.95778, which represents the precise 0.382-Fib level of the A-D height, which is how to properly define this primary level of reversal (the other two most common being 0.50-Fib and 0.618-Fib of the A-D height - not described in this chart).
So, let's see what comes of this chart. We won't hold our breath, but will probably return to this chart from time too time to make sure that we remain with the market.
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0.93849 was the line I used to define as a potential overhead resistance. This line was not defined by the model., but instead by price's history, which itself defined Point-B of a larger bullish pattern, whose completion suggest a potential rallying point at the time of the initial analysis.
Since then, price did rally, offering traders a multi-pip opportunity. Yet, this being the 11th week since price did reach that resistance level, it has also been the eleventh candle where price failed to complete its 38.2 expected level, which pattern traders tend to use as a first likely target.
If indeed price were to roll further down from here, I would suggest pattern traders to instead look at the 1.414 extension level of the XA leg as a next potential pattern target in case a bearish scenario did persist from current level.
I will add further comment on this chart as the occasion arises, but this being a weekly chart, feel free to prompt me to comment if some other minor technical event occurred.
The fractal nature of market geometries will allow any trader interested in geometric patterns to focus in any timeframe. One pattern that dwells in one timeframe will be given equal range of existence and pertinence at any other timeframe without distortion to its anatomy. This is much owed to apparent Fibonacci series, as well as more occult multipliers - Here, think ancestral numbers used in arithmetic, astronomy, architecture and music (the "quadrivium" applied to Forex, hence "4xQuad in the signature).
The proper application of these numbers can help anticipate a probable trend and likely destination, when there appears to be no directional sense at first sight.
Very fascinating field of study, I think