Forex trading short on AUD/CAD, US indices in consolidation over political uncertainty [Video]
|We talked last time about buying the dip on US stock indices but we still don’t have enough confirmation to open a long position.
It seems that corporate America is heading into a period of uncertainty.
Political instability causes uncertainty and uncertainty is actually worse than bad news when it comes to decision making.
Therefore, we may not see much movement until November when the US elections take place.
Technically, a long position may not be advisable right now.
We have been range-trading AUDUSD for a few weeks now and we see no reason to stop.
However, the range seems to be getting tighter.
If we use Bollinger Bands, we can watch for a Bollinger Squeeze.
Here we see one which was followed by a sudden dramatic move.
AUDCAD has also given us opportunities but we now see price action starting to consolidate into a symmetrical pennant.
If we want to open a short position, we need to see some technical confirmation.
Right now the stochastic oscillator is undecided and we need to confirm direction first.
Right now, AUD and CAD are pretty much tied as the strongest currencies.
This may change if we see a downturn in the price of WTI Crude Oil which has pulled back from its May/June high.
If we fall from the high of almost $82 per barrel, CAD should fall as well.
That’s all for now.
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