Last updated on October 13th, 2015
With so much hype on the three pairs, I have decided to just share the pure price action technical analysis results on them from my perspective. Not perfect, but it’s good to know. Even if you do not trade FOREX, it is definitely advantageous to know the complete picture through raw technicals as I strongly believe that the media and experts’ advices are just noise echoing two words- Fear and Greed. I’ll try to keep this simple and dummy-proof for those who are not familiar with price action.
However just in case, please note that the following ideas should not be construed as an enticement to buy or sell the financial instruments mentioned, and that there is no guarantee of profit of sort.
AUDUSD, Weekly Chart
The bias for AUDUSD pair is currently a bearish trend and the trend seems to get stronger as it goes. As visible, it is currently at the lowest over the past four years, and it will get lower. One interesting thing I’ve witnessed in this pair during a couple occasions of retracements is that it always ended up being shorted down hard in hundreds of pips when it hits a certain pivot level. Although there is no way to confirm but I got the feeling that there are big money (aka big banks & institutions) behind this pair doing the selling (either mass selling of Aussie or mass buying of US Dollar).
Therefore, with the accelerated weakening of Aussie Dollar, AUDUSD pair is most likely to continue plummeting.
USDCNY, Weekly Chart
The bias for USDCNY is a bullish after a reversal since 2014, which got confirmed at the start of 2015 with a higher low and a higher high thereafter. So the sudden devaluation of CNY is totally justified. The big money would have longed this pair since the start of 2015 and will still be holding it for compounding in long term as nearby resistance levels have already been exploited.
Therefore, with the explicit weakening of Chinese Yuan and possible strengthening of US Dollar, this pair will most likely to run high upwards.
XAUUSD, Weekly Chart
The bias for XAUUSD is currently a bearish trend since 2012. Having been consolidating occasionally, it finally broke out of range support and downwards this half of the year. It is safe to say that bull is weak in this pair, but I am not sure if it is because of the Gold’s dropping its value or US Dollar gaining value. Again, the chart from May 2013 to May 2015 is the reason why I trust technicals. If you looked back, you will realise that during that consolidation period is where the media and experts gain most views and revenue for their opinions. Because the price ranges, and when it ranges, it will surely hit whatever they ‘predict’. But with a condition; their account might go into deep reds in the other way before hitting the target. Hence speculators who trusted their views will either get margin called, or stop lossed if they’re lucky their capital management rules saved them.
Therefore, with the mild strengthening of US Dollar, Gold’s possible value is still unknown, hence the conclusion is that Gold is still not worth a place in our portfolio.
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If so, how much do you like my analysis guys? 1-10? Let me know in the comments! 😛
I hope this actually helps in enriching your knowledge about those FOREX and commodity pairs.. Leave your questions below too!
[Update on 131015: As an update to this analysis, see ‘October Focus: Pound Sterling against Australian Dollar?’ ]
The Independent Abecedarian
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