Yesterday, market was very choppy as we witnessed false breakouts in AUDUSD, NZDUSD and EURAUD. This is the reason why I keep mentioning we need to be very careful while trading volume less market. Despite of weaker Core durable orders from the US, AUDUSD and NZDUSD did not manage to hold gains and traded lower.
Today, we will be looking for some safer entries, and might trade some cross currencies such as AUDNZD. AUDNZD might present an interesting long opportunity after the break of the triangle on the daily chart. I think the pair might retest the triangle again and then trade higher subsequently.
We already have a bullish hidden divergence on the 4H chart, and continuing divergence on the 1H chart. We have two ways to enter a long trade for AUDNZD. First way would be buying lower. We should be looking to buy from the support levels like 1.1440, 1.1420 and 1.1380 as plotted on the 1H chart below. Once we reach these support levels, then we will look for bullish candle pattern to form on the 1H chart to go long AUDNZD. Initial target would be the previous high around 1.1580, and final target should be around 1.1640 and 1.17. Stop should be placed below the previous low or support.
Another more aggressive way to trade AUDNZD would be if we break higher and breach a down move trend line as plotted on the 1H chart below. Any break of this trend line along with previous resistance may trigger a long trade. Targets would remain the same with a stop below the previous low before breaking higher.
Conference Board Consumer Confidence is due later in the US session. Economists are expecting a decline to 79.0 from previous 80.3. Any better than expected reading might help the US dollar, and any further decline might help some oversold pairs like AUDUSD and NZDUSD to regain some losses. Other than this, Richmond Manufacturing Index reading can also cause a short-term effect on risk sentiment.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURGBP, GBPUSD, USDJPY, EURJPY, EURAUD AND USDSGD.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
