The last week of January which is also the first week of February has begun. It is a week rich in events in the economic calendar. The most important of these will certainly include the Fed’s decisions (1.02 at 19:00 GMT), and Thursday’s ECB and BoE decisions, which will be announced during the London session. Monetary policy decisions are always likely to cause more volatility and carry the risk of losing orders.
With this in mind, I try to trade lower-risk instruments and I consider crosses, i.e. currency pairs without the participation of the dollar, to be among such instruments, and this week I am additionally ‘avoiding’ EUR and GBP until Thursday.
AUDCAD – Head and shoulders on H1
I already took a look at the AUDCAD pair last Friday ( channel entry), where an interesting formation appeared – Head and Shoulders. Admittedly, it is visible on H1, so it will not necessarily have a long-term impact on the course of trading on the pair, but so far everything is going as expected. The neckline has been overcome and the price is currently around 30p below. It is also worth noting the strong support and resistance level of 0.9444, which was also overcome today.
Will there be downward divergence from this?
On the daily chart there is a chance of the start of a downward divergence. But whether it will form will be determined by the close of today’s daily candle. The previous divergence, which formed on 19 January, failed and the price went up. Perhaps this time the divergence will be more effective.
I will talk more about this pair and several others in my live sessions:
LIVE EDUCATION SESSIONS
The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions which you can attend from Monday to Friday.
More current analysis on the group : Trade with Dargo
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