On Wednesday I wrote “Both the AUD and NZD have had good starts to 2017. They are the best two performing currencies of the ones we monitor. A strong uptrend looks to be at least cooling as the pair roll over from a pivot high (1.1035) on Thursday (March 16) and a confirmed Fractal high on Monday (March 20). A SHORT position was taken on the close of the third down candle at close yesterday 1.0906 (March 21). Target 1 is the first resistance level at the 23.6 Fibonacci retracement and the 20 day moving average at 1.0845. T1 was achieved yesterday for a net gain of 62 pips.
The AUDCAD also rolled over and displayed some classic bearish patterns. The Tweezer Top and Fractal high Monday and Tuesday was followed by three strong down candles (3 Black Crows) the confirmation SHORT entry was on the close of last night’s candle at 1.0180 as the key 20 Day moving average was broken. The 23.6 Fibonacci level could provide some resistance to the move down to target 1 at 1.0080 (100 pips and the 50 day moving average). Target 2 is more ambitious, beyond the lower Bollinger band and at the psychological 1.0000 level. The pair was last below the 20 day moving average in January, so this could be a significant break if it is maintained. The position is against the longer term monthly up trend. The Parabolic SAR turned negative yesterday, the RSI at 51 is neutral but falling and MACD remains negative. A break of the recent high, over 1.0350-60 zone, would negate the position and resume the uptrend.
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