Sunday, November 15, 2015

AudNzd: A Technical Combination!

In the last update on Audnzd I used different technical analysis, headed by the elliot wave theory, to forecast a probable upward move.

There was a condition for a bullish opportunity.

Price could trace down a bit before rallying to break the upper trendline upside. This will be a trading opportunity to buy this pair with a good risk/reward ratio.

There could be a trading opportunity to ride wave C to 1.2175

Read the full analysis
After some days, price fulfilled the condition perfectly and hence, a bullish opportunity. Price broke out of the trendline with a a good bullish candle and a fast rally followed to the next resistance.

It should be noted that the terminative pattern shown above is an ending diagonal which, according to elliot wave theory, occurs at wave 5 of an impulse or wave C of a corrective pattern.

The long term bias is still bullish but a dip could happen in a few coming days before the bullish journey continues and here are the reasons

1. The breakout move from the ending diagonal is expected to be a motive 5-wave. Price chart below shows that wave (1) of this 5-wave is probably completed (at a resistance level) and price could dip (wave 2) before the big move.

2. There is a bearish candlestick pattern on the daily chart which indicates a possible weakness of the intra day bullish trend.

We have closed a large portion of our bullish position as we await the dip for more opportunity upside.

Check here for updates regularly.

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