AUD USD - USD CAD - Fibonacci Pattern work

23 giu 2021

Hello Traders and Analysts,

Breakdown:
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.

A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged neutral due to analysing two charts.
USD CAD Long due to purchasing further increments upon imbalances.
AUD USD - as price has overall since 0.80 provided short opportunities.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.

Master Key for zones

• Red = Three Month
  
• Blue = Monthly
  
• Purple = weekly
  
• Scarlet [Red] - Four day
  
• Orange = Daily
  
• Green = 8 Hour
  
• Grey = 4hour
  
• Pink = 1 hour
  

To see the original analysis see below;
AUD USD - 4hour time frame

link here:

USD CAD - analysis: [Long]

USD CAD -
Bigger picture using the daily time frame - here is why price has a high probability of reacting against this zone.


Using the four hour Fibonacci sequence (inverse) as a hedging mechanism for the overall counter trend - based upon the imbalance [monthly] at 1.22XX - 1.19XX
The Fibonacci extension aligns from the Top [1] - to the low [0] and has an extension target which perfect adjusts to [-0.27]


Compare the two charts - the right [8hour] shows where price has a high probability of completing the pattern - and the imbalance has been filled - with a chance of rejecting and going back to continue towards the overall weekly imbalance as previously analysed.


USD CAD vs DXY
What does this show here?
Well the US Dollar has been been seeing a downward move towards a strong imbalance which aligns with the USD CAD zone on the weekly timeframe.
With the Dollar showing weakness and the DXY showing relative weakness, while yes the Dollar is weak.
This important monthly zone will set up a buy/long opportunity where price will reject and consistently create an inverted pattern for example - Head and Shoulders, bull flag. Rejection wick for a false break.


AUD USD
Below is the Daily time frame - based upon the USD imbalance showing strength - the correction from 0.80 has been in a monthly imbalance. Now to add a shorter position - to hold for maybe one - three days.


Here is the Eight hour timeframe applying the same scenario but for the bearish AUD USD.


Here is the side by side comparison using the Eight hour (left) vs the four hour (right)
The imbalance wick has been successfully filled on the eight hour imbalance and successfully rejected.


GBP AUD Correlation
Correlation:
Correlation of GBP AUD vs AUD USD
Imbalance spotting is important to note on one pair like GBP AUD, however the web behind the imbalance is just as important to keep in mind when looking for imbalance trades as pairs are called pairs for a reason.
Looking into two variables where correlation is either Perfect positive correlation +1, 0 or Perfect negative correlation -1 i in simple Lehman's terms.
AUD is coming from a monthly imbalance meanwhile GBP AUD will turn positive where price is coming from a monthly buy imbalance.


Comparing the GBP AUD to the AUD USD - using a monthly correlation grid.
The current at time of analysing is -79.7% negatively correlated. This has been due to the weak USD in play and the positive correlation against the SPX500 and the USD associated with the index.

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