The tricky part about AUDSGD

I am located in Singapore and for me, Australian Dollar movement is kind of crucial because I would some day want to tour Australia. Not that I haven't done before. The last time I did, AUDSGD was one of the lowest moment. I am waiting for the best opportunity.

Fig 1 AUDSGD weekly chart

The recent movement of AUDSGD is kind of tricky, mainly because the counter took a dip, that was on the week of 4th Jan 2019. It in fact formed a hammer, this kind of signifies a possible reversal upward. While the upward trend seemed short lived since it kind of reversed downward after 2 bars, there nevertheless is a concern here, it still has not taken out the low of the the hammer bar and the downward trend is gradual, making it a possible correction to the upshoot.

 I have drawn up 2 fibonacci, one retracement resistance, the other projection. It can be seen that AUDSGD was stopped at the 61.8% retracement resistance level. While the projection from there is 0.87364 (127%) to 0.89678(100%). 

So what are the facts so far? AUDSGD resisted by 21-week moving averages, it continues with the downtrend guided by the 8-week moving average. It reversed at the 61.8% retracement line, confirmed  by it crossing the 50% retracement. Signs still tell a continuity.

This is a little abnormal method, but let's look at daily chart to see what might be the concern area.

Fig 2 AUDSGD Daily chart

If I apply Fibonacci retracement to the daily chart, there there is a zone which I will watch out for.

61.8% (0.94729) to 78.6% (0.93800). If AUDSGD is going to turn, this may be the point it will reverse up. But it will also have to be signified by some sort of selling climax (abnormal "huge" move) to reach and past the zone before reversing back. 

So will I get a cheaper Australia tour? Let's keep my fingers crossed.

A warm March afternoon, a peek at GBPUSD

It has really been a long while since my last entry, I think it was at least 3 years ago. I have decided at the time to focus on my new job since the pay was relatively good. It was coming to the end of 2017 when retrenchment happened...for the second time in my life. This caused me to rethink about what I wanted to do with my life.

I have considered starting my own business, from distribution of indoor farming products to consultancy, even looking into property. But at the end, I asked myself," what is one thingthat I would look at every single day and not get bored?" Trading became the answer.

To be honest it is really not the case. There are times when I am so scared of loading the next order when things kept going wrong. But after a year plus working on my trading I come to understand more on what trading is about. I will share more in my future blogs.

For now, let's talk technical analysis. I have made some changes since my last entry. My older readings contained too much indications an it confused me. I have since began to keep it simpler and simpler.

Fig 1 GBPUSD weekly chart

Fig 1 shown the weekly chart of GBPUSD. I have retained the 3 moving averages, 8, 21 and 55. I have also included the Bollinger bands. At this point of time, Fibonacci is my choice of indication.

Using the major down wave as reference. It is observed that GBPUSD has retraced by 50% which then reversed and at the present point supported by 23.6% Fibonacci retracement. However, I feel that the 38.2% and 50% resistance line is likely resistance but not enough to reverse the trend, 61.8% retracement line would be a stronger resistance.

At the same time, 23.6% line is meant as a resistance line, while it can be considered as resistance turned support, there is a better way to estimate a more accurate support level, s come Fig 2.

Fig 2. Fibonacci on counter trend

Redrawing Fibonacci retracement using the "counter trend" become more accurate. It become clear that GBPUSD has in fact supported at 61.8%  retracement  line. It is also interesting to note that it was supported by 50% retracement momentarily, moving back up to 38.2% area before continuing its onward trend. Since its rebounded from 61.8% retracement line, it has a higher low and high. So what next? answer in fig 3.

Fig 3. GBPUSD projection

To estimate where is may be going, I use Fibonacci Projection using the 2 lows (Oct 2016 and Dec 2018) and the high (Mar 2018). I am not really interested in all the projection resistance lines, only 61.8%, 100% and 127%. These are the 3 possible targets for GBPUSD, but which one is more probably?

That is where the original retracement range come back into play. For retracement, I am more interested in the zone between 61.8% to 78.6% range, while 100% to 127% zone for projection. Based on the intersection of these 2 zones, I figure that GBPUSD is likely to reach USD1.60 in the long run. However, there might be a pause at USD1.43 area. This is where the 50% retracement meets the 61.8% projection.

On a side note, based on the ascension of GBPUSD, it seems that investors are positive about Brexit lately. Not only GBPUSD i in favour of stronger GBP, same with EURGBP.

Using moving averages, GBPUSD has just crossed 55 weeks moving averages. chances that GBPUSD is on an up trend is high.