BarroMetrics Views:   

We are looking at the AUDUSD as I see a potential trade setting up. Yesterday we look at the context.Today we look at the current price action.Figure 1 shows the 18-day swing (monthly trend). We have just completed the various filters I use (see Nature of Trends):

• The time filters, the Whole Point Count
• The momentum filters, the Line Change
• The price filters, acceptance above the Maximum Extension

I am looking for a pullback to the yellow zone in Figure 1 to take a position. My stop would be below the end of the Primary sell Zone (0.7108).

Looking at the price action yesterday, I felt that the market had one more leg up on the 1-d. Ideally we’d push above 0.7712, hold below 0.7787 (0.7712 + 0.0075) and then head South.

I added 10% of the 5-day swing up (.0751) to the current high 0.7712 to get the maximum push above current highs, I would like to see.

Figure 2 is a chart from ChannelAnalyzer that shows the projected time line -  a high at the end of the month with a low around mid-June. This is a little out when compared with the seasonals (Figure 3) . That projects a high around the end of May week 3 and a low in the last week of May to first week of June.

My view has certain ramifications for the S&P. Those that have been watching the videos know that yesterday I sounded a warning for a possible rally. The AUDUSD confirmed that possibility. The strong rally in the S&P does suggest we’ll see a push up above 0.7712.

For the AUDUSD, I’ll let the price action dictate what I do when and if we get the correction for which I am seeking.

Figure 1 18-d swing

Figure 2 Hurst Time Cycle

Figure 3 Seasonals

(Chart through the courtsey of Moore Research)

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