It’s been quite a while since I took a look at AUDUSD. I remember the last time [see: May 16, 2016 Update] having some difficulty squaring the harmonic picture with the long-term channels. They just didn’t line up in any logical way.
In spending the past few days staring at the charts, it makes a bit more sense now. But, you have to simultaneously look at USDJPY, DX, EURUSD, SPX and CL. Good thing I have a lot of monitors.
At the time of that last post, AUDUSD had just tagged its 200-day moving average — normally a excellent spot for a bounce. But, it didn’t seem quite ready at the time.
It’s reasonable to believe AUDUSD will bounce strongly off its SMA200, but the falling red channel suggests otherwise. Anyone tempted to trade the bounce would do well to wait for it to clear the SMA100 first. If it can’t, there is much more downside potential. That .886 at .6584 is still out there, waiting.
As it turned out, the pair only bounced for one day before dropping through the SMA200 and spending the next two weeks searching for a bottom. It never made it down to .6584, which is actually helpful in constructing our new forecast.
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