Forex Technical Analysis AUDUSD : 11 Novem ber 2014
Business confidence remission
Today at 1:30 (CET) NAB Business Confidence index was released. It indicates the level of business optimism in Australia. This diffusion index is calculated every month by the National Australia Bank, based on a survey of more than 300 companies. The indicator allows estimating the investment climate improvement in the country, consumer spending and unemployment rate. This month the Business Confidence index has fallen 4 points vs. 5 points last month. Consequently, AUD/USD price dynamics was immediately affected. We may expect a further depreciation as the US dollar strengthens after the QE completion.
Here we consider the AUD/USD currency pair on the H4 chart. The price is moving within the D1 and H4 trends: the bearish trends coincide. At the moment we can witness a new trend formation, which will be intensified after the breakout of the fractal support at 0.85317. In the short-run, the current trend is confirmed by the candlestick pattern “absorption” (marked in yellow on the chart). We can also see there has already been the intersection of the Parabolic historical values and the trend indicator reversal in the direction of the red zone. The support level significance is also confirmed by the lower boundary of DonchianChannel. RSI-Bars oscillator verifies the current trend, but the final confirmatory signal is expected after the level breach at 39.7701%. In our opinion, it will happen when the price crosses the mark at 0.85317, which can be used for placing a pending sell order. Stop Loss is recommended to be placed above 0.86873. This mark is strengthened by the upper boundary of DonchianChannel, Bill Williams fractal and Parabolic historical values.
After position opening, Stop Loss is to be moved after the Parabolic values, near the next fractal high. Updating is enough to be done every day after a new Bill Williams fractal formation (5 candlesticks). Thus, we are changing the probable profit/loss ratio to the breakeven point.