ForexPros Daily Analysis August 02, 2011
Free webinar on ForexPros - The Correct Way To Use The RSI In Forex Trading
Expert: Steve Primo
Start: Thu, Aug 4, 2011, 09:00 EST
End: Thu, Aug 4, 2011, 10:00 EST
Steven Primo is a former Stock Exchange Specialist as well as a 34 year veteran of the markets. In this webinar he will show how the majority of Forex traders use the RSI incorrectly. Mr. Primo will explain how to properly use the indicator and then share with you one of his best trading strategies based upon this tool and his unique concepts
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Will AUD/CAD Form a Double Top?
Perhaps more than other crosses, pair of the commodity currencies go through more periods of consolidation. That happens because they often respond in a similar fashion to certain fundamentals, so their interactions during those times can be very boring. However, when those conditions end, pairs like the AUD/CAD can move as much as others.
This pair became more active in the past couple of weeks. Prior to that, the AUD/CAD had been moving mostly sideways, with a downward slant. The price found support just under the 100 SMA, at 1.0125 and rallied strongly to 1.0532, almost testing the previous high of 1.0554.
This development sets us a possibility of a double top reversal pattern. Some technical indicators, notably the MACD and the RSI are diverging from the price. Of course, these divergences are not valid unless the AUD/CAD actually makes a new high, or at least touches the last high of 1.0554.
That could create a double top and a potential good selling opportunity. In that case, we need to see a bearish reversal candlestick, like a shooting star, a doji or perhaps an engulfing line, that might start a move down to at least the 100 SMA. For the moment, it is speculative, but worth watching for.
Forex Trading Analysis written by Mike Kulej for ForexPros. For more information about currency charts visit ForexPros.
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