DreamsDefined
Long

AUD/USD - Potential Move Higher

AUD/USD (AU) is potentially set for a move higher. While I haven't entered a trade yet (waiting for confirmation), there are a number of converging factors:

  • AU is sitting at a point of support (trend-line support).
  • NZD/USD (NU) has not followed AU, and appears to be in the process of forming a small double bottom at near-term support (200 Day WMA ). NU may be developing a bullish momentum divergence. See the chart in the Update below.
  • AU and NU are highly correlated (+85%), therefore we have a correlation divergence. See the Related Idea below for more information.

Nothing is certain in trading, which is why I'm waiting for confirmation before trading. What kind of confirmations can we look for? There are many, and it really depends on your style of trading. A very simple idea is to wait for price to move strongly from the zone it is currently in - but you have to wait for a candle to close on your chosen trading timeframe.

I'll keep an eye on this one and update if anything interesting happens. But it will likely be after the fact, so if you're looking at this as a potential trade be sure to monitor it yourself.

All the best.

DD
Comment: NZD/USD chart that is mentioned above:

Comment: Further screen showing a similar pattern to the one that MAY be forming. Can't stress the MAY enough. Nothing is definitive.

Comment: Well this trade was wrong! Can't win them all.

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