timwest
Long

Australian Dollar AUDUSD set up for a 10% rally

FX:AUDUSD   Australian Dollar/U.S. Dollar
Using a mechanical-only approach to analyzing the market can provide disciplined, unbiased and unemotional projections.

The AUDUSD             has been building a base down here for the last 9 months where every single month has traded between 0.75 and 0.764. The trend-indicator "RgMov" hit a new 44-bar high in early 2016 which pointed to opportunities to buy 11-week oversold (using CCI (11)) and two signals have occurred so far. We are close to a 3rd signal.

The last 6 months have been a period of diminishing volatility as the monthly ranges have tightened. Notice the reduced ATR% line at the bottom. You can also see it in the size of the trading ranges on the monthly boxes.

The potential fundamental lift here is for the expectation of a rebound in commodities as investors look for a Gov't led infrastructure spend here in the US.

The "ENTRY LONG" for AUDUSD             will take several steps, but I like my odds here even though the market hasn't started moving away from the "white box" "mode" on the chart. If we hold above the yellow line at .7476 the market is in very strong hands and if above .7640 there is a strong chance for acceleration up. If we see acceleration up, then you want to force yourself to jump on board and to be prepared to buy dips, as labeled in the green rally forecast to the "target zone" shown.

Stop loss 0.7400
Target 0.84-0.87
Time frame: 3-7 months

Tim 11/11/2016 .75519 last
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Downward momentum seems quite strong and we just broke an important support. I'm not so sure about a position here.
snapshot
+1 Reply
timwest PRO purpurato59
a month ago
@purpurato59, The range expansion drop on Wednesday should lead to a follow-through decline by Monday that needs to reach to 0.7450 at least to confirm that this latest decline isn't a shake-out. Your time frame is daily and the conclusion is different on this time frame. If you don't see 0.7450 on Monday, it will be a good time to buy with a stop just under 0.74

3:33PM EST Friday 11/11/2016
+1 Reply
trade2win19
a month ago
Tim, I'm a new follower but I enjoy reading about your ideas.

I was wondering what you think about the impending USD strength if the Fed hikes next month and how that will affect your trade?
Reply
timwest PRO trade2win19
a month ago
@trade2win19, The potential Fed hikes are factored into the market every day. The probability changes almost every day. Australia has higher rates than the US, so holding the Aussie is a positive carry trade. If we anticipate a major commodity infrastructure spend here in the US, then Australia may likely rise as investors flock to participate.
+3 Reply
TCh
a month ago
AUD will consolidate and rebound
Reply
wtfrtr
21 days ago
Looks like your SL was triggered
+1 Reply
Gerry1
5 days ago
Agree with your evaluation of the upside but...I also view a potential for a continuation of the downtrend should a strong move below 0.71600 occur. I will probably place an OCO order above resistance and below support of that consolidation range in a few days.
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