Technical Analysis for Audusd, Cadjpy

Sophia Todorova— Sophia is the trading room coach for the London session, here at Winners Edge Trading. Sophia does analysis like this everyday in our trading room. Click the link to trade live with Sophia.

The coming trading week will be very interesting. We have the gbpusd trading in a daily pennant range, and the eurusd, refusing to give up without a fight, having closed back above the daily trendline after a very big drop on Friday. This week, however, I will be focusing on the cadjpy pair, as well as finishing off what I started on the audusd last week.

After moving up as far as .9338 during the week, the audusd fell back and briefly broke though the daily up trendline to test the .9175 support once more. At Friday’s close, the trading price was .9274. However, the bulls will not have it very easy to move beyond the .9300 level, as at that point, they have a sloping resistance line to contend with. As indicated on this 4hr chart, we can easily see that there is also a pennant range at play here.

In terms of trading opportunities, scalpers can take advantage of buying and selling opposite ends of the pennant range, bearing in mind that it narrows a bit each time it crosses from one end to the next. The better scenario, I think, is to wait for a breakout before getting involved. I am somewhat biased to a bullish breakout, since, (a) The recent trend has been bullish, and,( b) The bears attempted to pull the pair lower twice already, as seen by those long ‘skid marks’ (double bottoms)on the daily timeframe. I suspect that we might see a test of .9380 before the end of the week. However, despite what I may think, a range can break out in whichever direction it chooses, so trade with caution.

CADJPY

The 90.00 to 92.00 zone is an especially tough area for cadjpy. The weekly chart below shows this quite well. Since that level was broken by that strong bullish move three weeks ago, last week’s close, as well as this past week’s, saw a decided rejection of that level, as price continue to bounce off as soon as it is tested. Consequently, although we have a daily close just beneath the daily trendline resistance at 94.00, I am expecting to see a bullish confirmation by a break of that daily trendline.

As depicted in this 4 hr chart, there is what appears to be an inverted head and shoulders formation. A break of the trendline, and subsequent retest would give an opportunity to go long, with a target of the 95.50 weekly resistance point. It might be tricky deciding on stop placement, so it is a good idea to wait for trendline retests. I have tentatively identified 93.50 as a possible level for stop placement, providing the trade plays out the way I imagine.

An alternative move that could take place, is a move back down towards the 92.00 level, which is the support level of a 4-week range on the cadjpy.

I think we have an exciting trading week before us, so let us anticipate it with discipline, and trading plans ready. All the best, and a profitable trading week to you all!

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  • Hi Joe,
    I'm sorry I missed your post and your question. I was only able to access the new site since Monday. I guess any advice now would be a bit late now. Audusd is pretty bearish right now, and is not really going very smoothly. However, I see it heading towards .8900's before any meaningful bullish pull-back. Timing is essential for entry though. At present I do not see and opportunities to enter, unfortunately. I will let you know when I do see one. Thanks a lot, and I hope your trading goes well 🙂 Have a great day 🙂

  • joe

    hello sophia, again i'm stuck wth aud/usd when ibought it at 91.58 and next tow days the bearkdown happened let's call black thursday….so any new analysis about aud 4 next week or any advice? i told u b4 that my bank is advicind me what position to be taken coz i'm new