Forex Price Action – Aussie Forms Intraday Engulfing Bar, STB in Place? Aug. 15th

Yep, another day on the Aussie which happens to be one of my favorite pairs to trade daily.  Yesterday I talked about how the impulsive price action selling on the pair, combined with a bearish engulfing bar, clued me into further selling for the pair.

As many of you know from my impulsive and corrective price action theory, the impulsive to corrective series will continue until it finds a counter-trend impulsive move.  That is exactly what happened today, ironically via an intraday engulfing bar of the support zone we’ve been talking about around 1.0450 area. The pair then see-sawed for 3hrs forming a bear-bull-bear candle series, only to form a bullish engulfing bar communicating the buyers were now in full and others had joined the party.

The pair has since formed a flag/wedge at the top of the daily range, so am favoring the upside, but there is some decent resistance above with the daily highs at 1.0515, along with the 4hr 20ema at that same level.  So it will need to clear this to bring in new bulls on a break, but if others suspect a STB (short term bottom) is in place, they will likely buy on a pullback to the key intraday flag support at 1.0496, so two plays for bulls while bears have their levels to sell at.

engulfing bar impulsive and corrective price action aug 15th

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Global Market Commentary:
While global stocks continue to do nothing and have been as exciting as banging one’s head on a curb, investors are really just sitting on the sidelines praying hoping the CB’s of the world will hit CTRL + P and push markets higher, because we all know, a strong DOW is important to the corporate executives stock holdings economy for creating jobs.

Oil woke up from its crude slumber sparked by possible production/disruption fears as Saudi Arabia recalled its citizens from Lebanon, sparking general Mid-East/Iran War fears.

I would like to note the ultra low volume in the S&P which has been some of the lowest in years.  In fact, its intraday ranges for the last 8 days have been so dismal, that 7 of the last 8x we had 8 day trading ranges this low, it has usually market a significant top in the S&P.  See chart here (source ZeroHedge) so we could be seeing a major top in the index which is hovering just below the yearly highs and double top at 1420.

Upcoming Economic Events:

AUD Consumer Inflation Expectation 01.00GMT 21.00EST
AUD Average Weekly Wages (YoY) 01.30GMT 21.30EST
GBP Retail Sales (YoY) 08.30GMT 04.30EST
EUR Euro-Zone Consumer Price Index – Core (YoY) 09.00GMT 05.00EST
USD Housing Starts 12.30GMT 08.30EST
USD Philadelphia Fed. 14.00GMT 10.00EST

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Buddhist, Trader and Philanthropist

I'm Chris Capre, Founder of 2ndSkiesForex. I help traders of all levels change the way they think, trade and perform. As a professional trader, I specialize in trading price action. As a teacher, my passion lies in showing you how to re-wire your brain for successful trading. Want to improve your edge right now? Visit my Price Action Course page.

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  • DV

    Nice comment… “because we all know, a strong DOW is important to the corporate executives (slashed out) stock holdings economy for creating jobs.” I like your sense of humour Chris, and know you are partly serious…

    I love this type of market! it’s my perfect playground.. I took profit t1’s audusd at 1.0469, now have two orders set to either go long or short a bit above or below the current prices. Rangey choppy sideways markets suit me to a Tee

    Also shorted usdjpy last night and taken t1, we are in for a round of choppiness and short term ranging strategies should do ok till be breakout on AUD or SP500 or something changes… till then I am just playing the ‘fade the intraday levels’ game.. low risk high reward to risk opportunities

    • Hola DV,

      Ha, yep, I am partly serious about that comment (sarcastic is more like it) as we all know the DOW being strong has nothing to do with a strong middle class, since most middle class do not even own stocks…its the Corporate Executives and wealthy that own them. A strong DOW doesn’t create jobs or a healthy middle class, jobs do!

      But i’m liking this market as well as the price action moves are still great and tradeable, just smaller pip gains but still plenty to take. But good that you spotted the ‘fade the intraday levels game’ as that is the game in town now.

      Kind Regards,

      • DV

        Your absolutely right, the wealthy SELL (not buy) the stocks to mutual funds and everyone else…
        and jobs are not necessarily correlated to a high stock price… supply and demand is.

        I am still longer term bearish and currently short DOW and SP500, but position trades… if AUD closes bearish this week it will be an evening star and not be good for risk in general

        I am still happy to trade it long a bit lower for intraday trade but targets will be tighter