Saturday, January 24, 2015

Battle plan for AUDUSD 26 Jan 2015 daytrades

I spent the last few hours coming up with a battle plan for the AUDUSD on Monday.

Some notes about Monday:
- No major AUDUSD news
- AUD public holiday
- Daily ATR(14) is 103 pips, but the combination of Monday + public holiday + no major news should see volatility significantly below this. I'm predicting a quiet day of between 50-75 pips.

How price will behave will depend on where it opens relative to 0.79000. 0.79000 has good potential to be a strong S/R level, due to it clustering with Friday's low and close.

Scenario #1
If it opens above 0.79000, I expect 0.79000 to hold as support, and price to range 50-75 pips above it, with some potential to break down below 0.79000. If it rises all the way to 0.80000, I expect 0.80000 to hold as resistance. This would be a great place to go short. If it doesn't rise to 0.80000, I'd like to see how the range forms before buying or selling.

Scenario #2
If it gaps below 0.79000 on Monday's open, I expect price to fill the gap before hitting 0.79000, which will behave as resistance. Price should range 50-75 pips, with good potential to break down. I would short at 0.79000.

(click below to enlarge)

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