- AUD/USD nears resistance zone of 7385-7410 and measured resistance at 7572
- Reserve Bank of Australia event risk later today
- Use the Grid Sight Indicator to pin point shifts in intraday momentum
The down trend for AUD/USD from April 20 has been interrupted due to Friday's non-Farm Payroll release. The bump higher is pushing AUDUSD into retracement zones which may offer some resistance.
Additionally, later on today at 12:30a EDT/2:30p AEST, the Reserve Bank of Australia (RBA) provides their latest report on monetary policy. They are expected to hold rates steady, but the news release could provide some temporary volatility. Therefore, we can use the Grid Sight Indicator (GSI) to help determine shifting momentum and potential signals in the noise after the news release.
From a technical perspective, it appears the pair has sold off impulsively from an important turn on April 20. It is not uncommon for trends to be interrupted as it shakes out the weak holders of that trend. A couple of potential reversal zones we're watching are 7385-7410 and the 61.8% retracement level at 7572.
To determine if a bearish reversal or a continuation is taking place in those price zones, consider:
- What Grid Sight Indicator is saying about momentum
- Is Sentiment ( measured through SSI ) shifting in one direction or the other?
Look at AUD/USD (or even AUD/JPY, EUR/AUD) through the Grid Sight website with the chart setting of 'm3' or 'm5'. As price enters the potential reversal zone, see how GSI is reacting such that we want to the probabilities heavily shifted in one direction.
Note, GSI is NOT a news trading indicator. Therefore, wait at 15 minutes or so after the RBA announcement to begin seeing what the indicator is suggesting for momentum.
Speculative Sentiment Index (SSI)
Additionally, as price is pressing into a potential reversal zone, see if SSI is shifting. At the time of this writing AUD/USD SSI is running at +1.34. If the SSI reading shifts lower and possibly into negative territory, then it suggests a bullish continuation. If the SSI reading shifts higher, then it suggests a bearish reversal.
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For those that are unfamiliar, Grid Sight is a powerful big data indicator that can give you a look at the market by analyzing millions of historical prices in real time. By seeking out similar patterns, GSI helps you use that data to trade important levels coming up.
---Written by Jeremy Wagner, DailyFX Education
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