scorpiousg
Short

BEARISH CYPHER ON AUDCAD. TOOK IT'S SWEET TIME!

FOREXCOM:AUDCAD   Australian Dollar/Canadian Dollar
I'm looking at a Bearish Cypher Pattern on FOREXCOM:AUDCAD             , which after weeks of watching and waiting has just completed today on the Daily Charts . This is a short term play so we can anticipate a week or more to targets if the pattern plays out as anticipated.

Having been in consolidation since September, price action broke to the downside support of the consolidation zone last month.
Anticipating retracements back into the consolidation zone, I am greeted with the Identification of the above mentioned Bearish Cypher setup which as mentioned has now completed, with Stochastics (12,3,3) showing as overbought.

From here I will be looking for an entry basis on the lower time frames (usually the 1H) to get involved in this trading opportunity.
Targets will be as usual the 38.2 and/or 61.8% retracement of the CD leg of the pattern.

If extended targets are to be considered, I would be cautious in shooting for anything lower than the lows of the pattern as price action has found support at these levels which happens to be significant weekly support at about the 9627 price level.
To see continued downside on this pair, not only would price action have to close below the 9627 level, but we will also need to see a close below the lows of the pattern on the 6th             of this month, which incidentally produced a strong looking hammer candle, indicating significant buying pressure at this level.
Comment: As usual, I again forgot to mention another caution.
While fundamentals don't necessarily play a part in the the Technical Analysts considerations of market analysis, it should be noted that there is Canadian New House Price data being released in the next few minutes (12:30 GMT).
So I'd be cautious taking any trades in the next minute or so.
Comment: Ok, it's not visible on the Daily charts but following a double top on the 1H charts (beautiful entry reason), there was a pretty impressive selloff on this pair in which price fell nearly 100 pips in an hour.
I haven't confirmed the reason and was unable to get involved but this move came prior to Bank of Canada's Governor Stephen Poloz's speech (didn't get to hear it either).

Moving on though, price action on this pair has paused and is setting up what could potentially be a second chance opportunity to short AUD/CAD in the form of a 1H Bearish Deep Gartley formation completing at about the 127.2% extension of the patterns AB leg.



Targets will remain the same as for the original Daily Chart Bearish Cypher: 38.2% or 61.8% retracement of the CD leg.
At this point however, I will not be looking to get involved as we close out the week. So we'll have to sit tight on this opportunity until market open next week.
Saying that, Have a fantastic weekend all. I trust you are all getting into the festive spirit.
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