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.
Short AUD/USD
This aussie pair has rallied back up to .7900 but it looks like this psychological resistance area is holding. I also see hidden bearish divergence where price has made a lower high while the the oscillator has a made high. Stochastic is also "turning over" and looks be outside back below the "overbought" territory.
Another chart I like to look at when trading AUDUSD is the XAU. The XAU is an index traded on the Philadelphia exchange. It consists of a bunch of precious metal mining companies, mainly gold.
The reason I peep XAU is due to the close correlation between the AUD/USD pair and gold. These two have an 80% positive correlation. The correlation between AUD/USD and gold is so strong because Australia is the world’s second largest gold producer so the aussie benefits whenever gold prices rise.
As you can see from the chart, the index has been capped by the descending trendline. It attempted to challenge the 640 level recenty and failed. Stochastic is "overbought" and looks to be "turning over". What I'm trying to say is this chart supports my bearish view on the AUD/USD chart.
I'm going to short at market price currently at .7875. My stop loss (SL) will be .7930. My profit target (PT) will be the recent swing low at .7770.
Short AUD/USD @ 7875 | SL: 7930 | PT: 7770
Short AUD/USD @ 7910 | SL: 7930 | PT: 7770
