Category Archives: AUDCHF

Across Timeframes – AUDCHF

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 min ones. I wanted to look at this pair in further detail and expand on what I had previously written to include an explanation of how we look across timeframes in order to map and define how vehicles are moving.

Chart 1:

audchf240-chart1

We had been following the AUDCHF 240 minute chart shown in Chart 1 for some months by means of an Andrews’ fork originating in mid-December 2013. We use pitchforks to define and delineate the all-important path of price and seek to follow the strengthening and weakening of trend as the vehicle moves along. Using distinct A, B and C pivots we were alerted to the fact that this pitchfork was likely defining the path of price by the green circled action underneath the Lower Parallel in mid-March. To some people the fact that price was outside the Lower Parallel would disqualify the fork and start them looking for something else. Remember our focus is on the path of price – in other words it is the angle along which price runs that is important. In this case it happened to be beneath the Lower Parallel, but what sticks out is the fact that it was along the dotted Sliding Parallel.

We continued to follow price noting how it “stepped up” to find arrowed support along the Lower Parallel and then moved higher to find resistance along the Median Line. Note how the purple highlighted Sliding Parallel acted as support before price stepped down once again to once more find arrowed support along the Lower Parallel. We are watching previously proven lines of support and resistance given to us by our early definition of the path of price.

From the Lower Parallel price started stepping up once more – the series of arrows show this move. Note the penultimate arrow shows support along a Sliding Parallel that had previously acted both as support and then resistance. This is also the case with the final red arrow showing how once again the purple Sliding Parallel acted as resistance and then once more as support. As on the horizontal when a line of resistance becomes support that is viewed as bullish.

Chart 2:

audchf60-chart2

Chart 2 shows the same vehicle on a 60 minute timeframe and is something I have written about in a previous article. This smaller chart allows us to use the same methodology and techniques to look at the moves we have seen in Chart 1 but in finer detail. Without going into too much detail – this is found in the previous article – the third green circle shows a conjunction of support and a low-risk, high probability place to take a long trade. The resistance along the red Sliding Parallel became support in the same place as we witnessed an arrowed touch on the tested and proven blue Lower Parallel. Not surprisingly price took off from here and we have been tracking it closely ever since. We are watching it move in the channel defined by the two purple Sliding Parallels though are aware of a potential stepping up of support as shown by the red arrows. A stepping up of support will often lead to a stepping up of resistance too and we are currently watching to see whether we now push above the Sliding Parallel resistance and set a new, higher channel in the line of the fork. The move from the blue Lower Parallel at 0.8155 is now worth some 210 points for a risk of a 10 point stop beneath prior support.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8759

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

Change of Behaviour – AUDCHF 60 min

I have received an email asking me to have a look at the recent change of behaviour that we have seen in the AUDCHF via the 60 minute chart. This is something that I will probably cover in greater detail in tomorrow’s free webinar – registration at the bottom of this article.

Chart 1:

aj-chart1

It is very apparent from Chart 1 that from early April the pair has been moving sideways to downwards and we have tracked this by means of a pitchfork. Using Median Line Analysis we look to find and define the all-important path of price. Having done this we are then able to look and trade off high probability areas or lines of support and resistance along the angle that we have discerned.

The initial validation of this downfork came from the series of lows along the lower quartile but perhaps more importantly it was the action in the series of green circles that drew attention. There was a stepping up of support in the angle of the fork, by which I mean that the areas in which support was to be found were becoming further away from the Lower Parallel. This tells us that there was a bottoming out in the vehicle and that it was certainly worth following to see if there was indeed a move to the upside beginning. Importantly the last green circle shows that support seemed to be establishing itself along the line of the Upper Quartile – a line that had previously been resistance.

Chart 2 shows how price continued to move to the upside and how when it breached the red Upper Parallel we drew the blue pitchfork in order to try to define the new path of price. Using the distinct A, B and C pivots we were quickly able to establish some validation of this new pitchfork by means of the Lower Parallel touches and reactions on 6th and 7th of May. We also saw a line of potential resistance forming along the blue dotted Sliding Parallel.

Chart 2:

aj1-chart2

What this Median Line Analysis allowed us to do was to meld two concepts to provide a low-risk, high-probability long trade from the third green circle on 8th May. Firstly look at the puce Sliding Parallel in the angle of the red fork – the first two green circles show where it acted as resistance and the third shows where this resistance became support. As on the horizontal when a line of resistance is breached we look for price to come back and test that line. The second important line ids the Lower Parallel of the blue fork – this has already been tested and validated as a line of support on  a couple of occasions and we could look for it to provide support once more.

When these two factors coincided at the same point in the third green circle they provided an obvious place to look for a long trade. By placing a stop beneath the horizontal brown line at 0.8160 we were using prior support as our safety net. The long could then have been taken at 0.8167 at the conjunction of the puce Sliding Parallel and the blue Lower Parallel. A mere ten point stop would have been enough to enter this trade with some confidence.

Since then price has indeed moved considerably higher – the current high being 0.8315. I hope that I have shown how Median Line Analysis using pitchforks allows us to quickly establish the path of price and to use high probability lines of support and resistance to enter low-risk trades.

The Cross Pair Analysis service uses Median Line Analysis to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and 20 min ones.

I recently hosted a webinar looking at these pairs – it is available to watch at this link:
http://www.coghlancapital.com/node/8018

I will be hosting another one on Tuesday 13th May – free registration available here:
https://www4.gotomeeting.com/register/145063263

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup