Forex Trade Signals and Setups Jan. 4th
AUDUSD – Holding Near Critical Level
The Aussie paused right at the critical resistance we mentioned yesterday at 1.0386, resulting in some interesting price action with the pair selling off about 75pips from the open, only to be bought up suggesting on an intraday basis the buyers were willing to take a pullback to get back in the pair. This is interesting considering they have bought it in front of a major 3+month resistance level which held back in early Dec. 2011 and sent the pair crashing approximately 500pips in 6 days.
This could be a sign of confidence in the bulls willing to take a the pullback in front of the resistance and a possible cue to an upside break. Also to note is the rejection from the last time was much stronger and closed down when it reached this level, whereas yesterday it held towards the highs.
We suggest waiting for a breakout-retest setup of the aforementioned level or taking a pullback to the 20ema on the 4hr time frame. However, if the market takes out yesterdays lows just above 1.0200 and the 20ema, then we will look for intraday shorts to sub 1.0100 and 1.0050. Keep an eye for price action triggers tomorrow if the market has some solid volatility for clues to the next short term leg.
Oil – The Ban on Iran
After having a strong impulsive run for the last two months of 2011, Oil closed the year just around the $100 a barrel mark. It started the year busting out of the gate fueled by news on the Iran Oil Ban, which, unsurprisingly put upward pressure on oil.
Price action has held towards the 6 month high at $103.38 but any price action trigger at this level with a clean breakout should quickly send the commodity to $104.60 in a jiffy. After that, $106.84 is the next line in the sand the bulls will target so keep an eye for intraday price action patterns on the 1hr and 4hr time frame for clues if the breakout is for real and look to get long with stops below the key $103.38 level, possible below today’s low.
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