Yesterday was marked mainly by a strong increase of interest rates in Turkey. Markets however, didn’t make anything with such decisive action and the USD/TRY currency recovered losses with a vengeance. In the evening there was a decision to reduce FED asset purchase by 10 billion dollars – it also didn’t significantly affect the USD exchange rate. After short remembering of yesterday situation let’s move to the Price Action Signals review:
New Zealand dollar loses on its value – which leads to rally on AUD/NZD. The currency pair starts approaching the 21-day EMA and resistance line. A clear sell signal in this area will give opportunities to open short positions in accordance with the long-term downward trend.
Yesterday I was always writing about this signal – you can read it here. As you can see, it is worth to move to lower TF (e.g. H1), especially when testing important levels. The clear signal can be used to open a position with a very good profit to risk ratio (current position brings four times more return than the initial SL). But still, keep in mind that such position and signal will be less effective that those which we observe on H4 and D1 charts.
Ongoing consolidation under the key resistance was tested twice in recent days, but there is still no clear sell signal. For now, it seems that it’s better to let go and wait for safer opportunities to trade on this currency pair.
Price rebounded twice from the zones of 8 and 21 EMA, creating a false breakout above resistance level. The bears are surely in rule when it comes to USDCHF and we should look only for short positions aimed at the key support at 0.8830.
Gold once again is getting ready to attack the key resistance around 1268. We should look for clear signals to sell which will give us opportunity to trade with long-term downward trend.