Why AUDUSD is Likely to Trade Lower on 1st Week of November 2014
Hi, this an update to the idea: Why AUDUSD is Likely to Trade Lower
Since the idea was posted, price has consolidated retraced to as high as 0.8850. At time of writing, price is trading at 0.8710s and is showing intention to breakout on the downside, forming the Wave 3 (strongest wave) of an Elliott 5 Wave Pattern.
In short, price action indicates that it is likely that the break out of this massive Head and Shoulder Pattern, during this coming week.
Break Out Condition:
When price trades below 0.8670.
Stop Loss:
Above 0.8765.
Taking Profit:
Level 1: 0.8400
Level 2: 0.8200
Risk:
There is always a risk of a false breakout or pullback.
However this risk is much lesser now, compared to when the idea was first posted.
Plausible Fundamental Driver of Bearish Price:
General market expectations of US Interest Rates to increase versus expectations of Australian Interest Rates to hold, leading to the unwinding of leveraged USD/AUD carry trades.
Weaker China economic data and lower commodity prices are also contributing factors.
References:
Elliott Wave> www.elliottwave.com/...Simple-As-A-B-C.aspx
Weekly Charts> www.marketsmith.com/...weekly-stock-charts/
Head & Shoulder Patterns> www.investopedia.com...technical/121201.asp
Carry Trade> www.investopedia.com...x/07/carry_trade.asp
I have linked a previous written idea on EURUSD Head & Shoulder, just to illustrate how powerful this pattern can be.
Like it, Share it, Follow it~
Trading View: BreakOutArtist
StockTwits: stocktwits.com/BreakOutArtist
Twitter: twitter.com/BrkOutArtist
Facebook: www.facebook.com/brkoutartist
Since the idea was posted, price has consolidated retraced to as high as 0.8850. At time of writing, price is trading at 0.8710s and is showing intention to breakout on the downside, forming the Wave 3 (strongest wave) of an Elliott 5 Wave Pattern.
In short, price action indicates that it is likely that the break out of this massive Head and Shoulder Pattern, during this coming week.
Break Out Condition:
When price trades below 0.8670.
Stop Loss:
Above 0.8765.
Taking Profit:
Level 1: 0.8400
Level 2: 0.8200
Risk:
There is always a risk of a false breakout or pullback.
However this risk is much lesser now, compared to when the idea was first posted.
Plausible Fundamental Driver of Bearish Price:
General market expectations of US Interest Rates to increase versus expectations of Australian Interest Rates to hold, leading to the unwinding of leveraged USD/AUD carry trades.
Weaker China economic data and lower commodity prices are also contributing factors.
References:
Elliott Wave> www.elliottwave.com/...Simple-As-A-B-C.aspx
Weekly Charts> www.marketsmith.com/...weekly-stock-charts/
Head & Shoulder Patterns> www.investopedia.com...technical/121201.asp
Carry Trade> www.investopedia.com...x/07/carry_trade.asp
I have linked a previous written idea on EURUSD Head & Shoulder, just to illustrate how powerful this pattern can be.
Like it, Share it, Follow it~
Trading View: BreakOutArtist
StockTwits: stocktwits.com/BreakOutArtist
Twitter: twitter.com/BrkOutArtist
Facebook: www.facebook.com/brkoutartist
