Sunday, December 7, 2014

AUDUSD Forecast for 8 Dec 2014 (and live calls from 24 Nov)

I spent this afternoon analysing the AUDUSD and coming up with a battle plan for tomorrow. This is what I think will happen.

According to OANDA, retail traders are still overwhelmingly bullish (69.8%), suggesting that the AUDUSD will continue to fall.

How price will behave during the Asian session tomorrow will depend on whether the AUDUSD opens with a gap, and where the gap's located.

But assuming there's no gap, I believe the market will open with the AUDUSD initially falling to last week's low, which will behave as support. 

Price will then rebound to 0.83500, trapping any bears who prematurely entered short. 0.83500 also serves as the 50% retracement level of the recent NFP-driven downswing. To me, this looks like an excellent resistance level, and any bears who closed their positions on Friday will re-enter around this level at a good price. Price will then resume moving downwards. I'd expect last week's low to break either on Monday or Tuesday.

There is a medium-impact news item coming out on Monday (ANZ Job Advertisements m/m) but I don't think it'll have much effect. China's trade balance will also be released some time tomorrow, which may be a wild card. Chinese news releases will tend to impact the AUDUSD significantly. Since the time of this news release is unknown, the only thing you can do is to keep an eye on your stop loss. 

(click to enlarge)

My live calls from 24 November 2014

I made three live calls on 24 November 2014, using the 4H timeframe. How did they go?


I predicted that price would retrace to 1.25000 before falling again. That actually happened.



I would say this forecast was 100% correct. 


I predicted that silver would retrace to 17.000. Price retraced to 16.723, only 28 pips shy of 17.000. It then resumed moving downward to 15.000 as predicted.



I didn't quite get the retracement fully correct. If I did try to trade this, I probably would've missed my entry. Besides that, the forecast's directional move was correct. I would give this 75%. 


I predicted that price would retrace to 90.000 before resuming upwards to 91.000. It only retraced to 90.342, but it did move up to 91.000. This forecast was partially correct.



I would rate this forecast 60%. The retracement was too shallow and I would've missed my entry if I tried to trade it. I was correct that price would return to hit 91.000.


My forecasts were pretty good. The worst that would've happened was missing my entry. 

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