A great opportunity for Shorting AUDCAD

Dear Friend,


Welcome to this review of AUDCAD Short trade.

As promised EU call made 220 pips and now it is time to see if GU can also offer some great pips. If you are in rush, this is not the best post for you to follow.


Let’s start reviewing Australian Dollar in this section.

First thing is to show you the use of Cyclic lines on TradingView (TV). Amazing drawing tool. Look for that in patterns. Time Fibo is slightly different but they are almost the same. You can measure the distance between the major swing highs or lows and it tells you a possible swing in the future.


This is weighted average AUD (daily). It took 121 days since the first swing high to make the second one. If we use the same number of 121, Yesterday we made a major Swing High!




See the wedge and rising trend line below the wedge. This is weekly average.




See where the current price is right now! Touched the lower band of the wedge and pulled back. EMA 14 and 21 also kept the price lower. We should see the price at least visit the rising support if not breaking it and continuing lower !

Now if I add key Fibos and a few lines the full picture of the weighted average is going to look like this.





See how many different Fibo PLUS lower band of the wedge PLUS time fibo PLUS EMAs on weekly suggest a pullback in AUD.




You want to see something amazing. See this.

This is AUD futures. It is highly correlated with AUDUSD. This daily chart shows that every 258 day or 176 bars we have a major swing high or low. Interesting that Cyclic lines suggest that recently we had a major swing. (Note: Cyclic lines are not supper accurate, they give an approximate date) High or Low? Yet to find. For now I would say high because of the number of the major resistance levels that we have above and also remember that weighted average also suggested the move lower for AUD.




Next this is what I see on the weekly AUD. It is sort of self-explanatory. Right?




Just imagine if weekly candle closes like this or lower? Wow… an impulsive move lower would be on the way. AUD futures are highly correlated with AUDUSD therefore AUDUSD can be a good short too. There reason that this call is not on AUDUSD is because I am still not sure about USD, particularly with the recent YEN bullishness.


Points that I do not like about this chart:
1) It could not reach to 38.2% Fibo
2) We have EMAs to fight with if we want that to go lower



This is daily Australian 10 Yrs Bonds. Opposite correlation expected. See how RSI diverges the price trend. I would expect this one to bounce here and heading to the Fibo overlaps and falling trend line.




This is daily Yield and the lower it goes the weaker the currency is. Very easy chart to read right?

I will update you on CAD soon

Look at the false breakout of the key resistance on AUDCAD. The reason for that is that we had major Fibo level there as you can see. (the dotted line)

That is where I took my profit on AUDCAD Long.

See the weighted average CAD. As you can see it bouncing right now because of the FIBOs and see where the target is.
The issues is that Cyclic lines suggest that Friday is the last day for CAD bullishness. But as I said these dates are not always accurate.

At 10:30 we had crude oil news and turned out that there has been an oversupply of OIL and therefore what you may expect is that the price of the OIL should drop. That is exactly what happened for the first 30 mins and then the move faded as you can see below




The above chart was the UKOIL. Crude futures also about to break the resistance



same as USOIL


And you may ask that has nothing to do with AUDCAD short. In fact CAD is highly correlated with OIL price as their economy is highly relied on supplying OIL.

See the following correlation between OIL and CAD (weighted average).




So now OIL is heading higher and CAD is heading higher too.

Here is the KHAN’s question for you. If you were going to trade OIL would have gone short OIL?
Think about it and think CAD weighted average. See how many layers of supports we had on weighted average CAD. It could not go lower and therefore OIL could not go lower too. Remember they are highly correlated. But see how much room we have to get to the end of the CAD bullish move. Not too much. Right? Now that can also help you on Short OIL. With a little bit oh help from Bullish USD and bearish CAD we have like 5% drop in OIL price.

For candlestick traders this AUD Monthly candle look very bearish. (the last candle)

We have already shown that probably we will see a top here and now see how EMA 14 and 21 acting as a resistance. Then you can guess that, All June we will be having a bearish AUD.
Add that to any strong currency and trade it. Like a lab right?