Follow Up to Set Ups I am Watching

• ragheehorner
• February 10th, 2010

I had posted a few set ups at chart.ly earlier today and wanted to follow them up with some analysis and set up detail.  The two set ups were both on the daily chart.  I’ve updated them to show how the set ups look now as they’ve developed from where I posted them earlier today at chart.ly.

The $AUDUSD finally broke out of the intraday congestion I had been avoiding after the 30 minute chart I had been swing trading long transitioned into a sideways market. (see update at http://chart.ly/vkqbwh) Knowing when to avoid a chart is as important as knowing when to look for a set up on it.  This evening’s spike has pushed prices higher towards the daily resistance waiting at the 38.2% Fibonacci Retracement level.  The shallower (and more aggressive 23.6%) has been broken.  The 34ema low is waiting just above the Fibo resistance…that’s the window of opportunity for a short sell.  A swing entry always feels a little uncomfortable since the entry itself is contrarian to the near term trend.  But remember the entry is an overall trend follow.

The original $AUDUSD chart update is at http://chart.ly/rd5e3g

The $USDCAD daily has pulled back to my swing buy trigger at the 34ema high and the 100% Fibo Retracement.  Some candlestick traders may see these last three candles as a “Three Black Crows” pattern.  It’s not a perfect example of the pattern but it’s likely popping up on some traders’ radar.  I also temper this with what I have also seen when the market falls three candles in a row…and it’s influenced by Fibonacci numbers patterns.  A possible pattern is three candles down followed by two candles up.  Obviously these two ideas conflict so I should be ready for either scenario.  But since prices have traded lower to a support level that I feel is reliable, I will look for the two rally days.  I will also pay close attention to how price action behaves around the 1.0600 major psychological level.

The original $USDCAD chart update at http://chart.ly/qbsp3n

- Raghee

Tickers: AUDUSD, USDCAD

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