The following is the AUDUSD daily chart as of DEC 24th, 2009. If you observe the chart, you can see that there was trend line support which was broken earlier by the daily chart. Now the stochastics and CCI have reached the oversold region. The stochastics has crossed below the 20 line and now trying to cross above it. The CCI has cross below the -100 line and trying to cross above it. So the daily chart is now retracing back.
But the bollinger bands are clearly downwards. So I am thinking that the trend may retrace until the support line and then the support line may act as the resistance then.
Even if the support line does not act as the resistance line, at some point in the retracement a doji with a small body and a long tail or a bearish engulfing candlesticks may form. This may happen at the red dot shown in the picture.
If the above two does not occur, the graph may go up where the CCI and Stochastics may reach the overbought region and then the graph will follow coming down again following the trend. So I think the following are the opportunities for this currency pairs to enter a short trade.
1) If the graph reaches the trend line and reverses it is an opportunity to enter the short trade.
2) If a strong doji or a strong bearish engulfing candlesticks are formed somewhere in the retracement it’s a good opportunity to enter a short trade.
3) If a the stochastics and CCI reach the overbought region and try to cross down the overbought region it’s a good opportunity to enter a short trade.
What do you guys say about this?
audusd possible trade opportunity in a few days
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