This one has been my favorite and easiest to trade currency pair in the last year
First of all, I want to thank everyone who took the time to send me your suggestions about the content, type of analyses, etc that you would like me to write about…
If you still want to send me your feedback, please do it: firstname.lastname@example.org
I’ll really appreciate it!
One of the suggestions that kept coming was that I should do a more in depth analysis of the short term charts…
And you know what, I will definitely focus more on the short term charts, on both: short and long term charts, both of them are important…
Now to the topic!
This is why the AUDUSD has been my favorite currency pair in the last year
Take a look at the daily chart:
This is exactly the kind of stuff that I like to see on my long term charts to feel comfortable about them:
Clear support & resistance levels: This way I know what kind of market swings I’m going to get, where to set my take profit levels, etc.
Clear reaction from S&R levels: This way I get to know the sentiment of the market around those levels. It’s not the same to see a clear rejection pattern around that level, than seeing the market slowly reacting to same level. See my point?
In the AUDUSD case we get both, clear support and resistance levels, and upward/downward pressure around those levels.
That is what I call an easy to trade currency pair, you know exactly when the market is going to get rejected, you know when to go short/long, you know every thing about it…
In the forex market there are times when 2 + 2 equals 5, in this chart however, 2 + 2 equals 4. You know I’m talking about right?
When should we be ready to trade trade it?
Aha, here is the tricky part… (and what most of you suggested on your emails).
We cant proceed until you I explain you a very important concept, if you are multitasking quit doing everything else, and focus on this because it’s very important…
When the market gets close to an important level, we don’t know whether the market its going to break through that level, stall around that level or get rejected from that level…
That would be the million dollar question…
Let share a secret with you… you dont need to know. How about waiting for the market to tell you what it is going to do.
Aha… You see where I’m going?
When the market gets close to an important level, it tends to range (this is kind of the fight going on between bulls and bears trying to decide which way to go).
Right now in the AUDUSD it looks like this:
So we have two green lines there, and we are waiting for: a breakout of either, of the upper resistance level or the lower support level.
If it breaks the resistance level I’ll be looking for long opportunities, and if it breaks the bottom of the range I’ll be ready to look for short opportunities.
Which currency pairs has been your favorite in the last year?
What do you think about the AUDUSD?
Do you agree with my analysis?
Let me know in the comment section…