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.
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 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.
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