Near-term Setups in AUD/USD, USD/CHF and Bitcoin (BTC/USD)

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Here’s an update on a few of the setups we’ve been tracking this week. For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy.

Fading Aussie Weakness

AUD/USD120min Price Chart

Aussie turned from a key weekly support confluence with the advance pulling back from near-term uptrend resistance. I’m on the lookout for a possible exhaustion low on a move lower towards confluence support at 7760/62 where basic slope support converges on the 61.8% retracement of the near-term advance and the March open. Intraday trading levels remain unchanged from earlier this week.

AUD/USD IG Client Positioning

  • A summary of IG Client Sentimentshows traders are net-short AUDUSD- the ratio stands at -1.14 (46.8% of traders are long) – weak bullishreading
  • Retail has remained net-short since Dec 19th; price has moved 2.9% higher since then
  • Long positions are 5.1% higher than yesterday and 5.8% higher from last week
  • Short positions are 3.1% lower than yesterday and 4.9% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUDUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current AUDUSD price trend may soon reverse lower despite the fact traders remain net-short.

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Bitcoin Prices Tumble Towards Support

Bitcoin is on the move after failing at the February highs. The focus is lower while within a well-defined near-term pitchfork formation. Initial support targets eyed at 9168 backed by 8850-8915. I highlighted this setup including the near-term trading levels in today’s Bitcoin Scalp Report.

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Pending USD/CHF Exhaustion Trade?

USD/CHF Daily Price Chart

The Swiss Franc has remained under pressure since the start of the week with USD/CHF pressing into fresh monthly highs today in New York trade. The advance is testing confluence resistance here at 9513/26 here the 61.8% extension and the 38.2% retracement converge on the proposed median line of the ascending pitchfork. Note that daily momentum is also approaching the 60-threshold after recovering from oversold territory. Bottom line: if we breach confluence resistance here, look for a stretch towards 9600. For now, I’m looking for signs of near-term exhaustion with bullish invalidation steady at the 2017 low-day close at 9439.

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