I'll be scouring the charts for "actionable masterpieces". These will be signficant chart patterns or set-ups that I feel are not only tradeable, but also have a high probability of making big profits with little risk. Whenever I spot an "actionable masterpiece", I will post an annotated chart (my chart art) along with an explanation. My goal is to help you learn how to spot these low ocurring but highly profitable "actionable masterpieces" yourself.
Sell AUD/USD
Check out that recent rally! Woowee! All because Australia's Prime Minister Howard suggested that interest rates were still low which traders interpreted as guaranteed rate hike in the near future. But what goes up, must come down. CPI and PPI figures came out this week with weak numbers proving that the Prime Minister was probably drunk. Now this pair has started to reverse and it's time to get ours.
There had been bearish divergence on the daily chart for over a month now. This is a great example that during a strong trend, divergences suck...until they work. Now that interest rate expectations have changed, I look for this pair to continue to fall. Immediate resistance is at 8300 and this is where I will go short. My stop loss (SL) will be above the swing high at 8400. My profit target (PT) will be 8120, the .382% Fibonacci retracement level. I plan to periodicaly tighten my stop if the trade goes in my favor, so stay tuned.
Sell AUD/USD @ 8300 | SL: 8400 | PT: 8120
