AUD Tram Tracks

Good Evening Dynamic Traders,

It's been an interesting day in the markets where most currency pairs did some form of a retracement/reversal. After every big move there has to be a breather or consolidation and given that the markets moved in a big way last week due to NFP and all the other news items, price is finding its natural balance.

Below is the AUD daily chart which has been rallying up since March this year. Having hurdled through a significant resistance, the value index and Fib clusters, it could have been thought that price may have a clear run up for a few hundred pips. Not quite the case however, as MACD is showing divergence and there is a tram track formation appearing. What will happen next?

Price could come back and retest the resistance turned support and potentially the value index in which case confirmation of further reversals would be required before any action could be taken. Alternatively it could do a continuation in which case appropriate employment of ESLT would be desired.















Good Trading!
Bijal Shah