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Here's Why I Think AUD will find Strength Soon...

December 21, 2018

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Here's Why I Think AUD will find Strength Soon...

December 21, 2018

 


This is the daily AU chart and the price has been coming down sharply since 2011. The sentiments had been bad until middle of 2017 when the price breached above the blue line and stayed above it for a while (see blue cross). This behavior is telling us the selling has eased or selling has less conviction after this point. Buying or accumulating has begun and will do so going forward.

 

 

 

Then, in early 2018, sellers showed up again. But this time the price drop hasn't been as rapid and deep as we saw back in 2013 and 2014 (arrows).

 

The drop now has been more gradual...cascading type. This is telling us that buyers are absorbing new sellers' supplies. The price action around 2017 (blue cross marking) has signaled this pair is getting ready for a big rise - but only after a relatively brief pullback is complete, according to my studies.

 

There is a high probability for a pullback to happen soon after sighting the blue cross, and from the end of the pullback, the price would reverse and move up strongly to create a new high. This action plays out time after time if you know how to look for it.

 

We are seeing a steady pullback since early 2018 but it has not created a new multi-year low or had a rapid price drop like before. This too is confirming the major selling is pretty much over or at least coming to a stop.

 

The SAME scenario is being played out at lower time frame as I am showing this in 4-hourly chart:

 

 

We see from the blue cross marking, the price is seen breaking up from major selling point marked as blue line Then we are getting the pullback right now.

 

How deep the pullback is going to be is not easy to tell - it can be shallow/weak <10% or strong >90% before reversing higher.- it's also possible the pullback can break the last low but it still does not mean the selling is dominating or AUD will be going into further slide.

 

 

What I would like to see next:

  1. I expect the price reverses before 0.700 level

  2. Then price must break above 0.733 to tell me the next stop will be at 0.763

 

 

Books By Ramesh Selvarajoo

 

 

 

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