Currencies | Oct 29 2010
By Rudi Filapek-Vandyck
Veteran trader and educator Jerry Simmons believes AUD/USD is "very vulnerable" to a significant pull-back that could last weeks and months, if not years. Simmons' view is not only based on analysis of AUD/USD charts, but also on correlations and inverse correlations to other markets, especially the DXY (Dollar Index) which shows a bullish scenario. A bullish Dollar Index acts as a confirming factor (“CF”) for the bearish outlook derived from AUD/USD chart analysis.
Simmons' analysis identifies major resistance at parity AUD to USD and a secondary resistance slightly above that, at 1.0350-1.0450. He concludes that should we get a confirmed breakout (B/O) above the parity level, the current wave 5 move (Elliot Wave) is likely to meet resistance at 1.0350-1.0450 and that is, from today’s perspective, going to be the likely end of wave 5.
Investors can take heart from the fact that Simmons also believes that, so far, the bullish case for the Aussie dollar remains in force. Thus any trades should continue to be to the long side until we have confirmation of a possible reversal. He identifies four key reversal breakouts (“RBO”) that must all happen in order for him to definitively conclude that the bullish scenario for the AUD has changed to a bearish scenario:
1. RBO below 0.9725
2. RBO below 0.9530
3. RBO below 0.9450
4. RBO below 0.9300.
Jerry Simmons has over 25 years of full-time trading experience. He is the senior partner and head mentor for the “Masters” Programme within the education system at New York based Advanced Trading Workshop (ATW). ATW recently set up shop in Australia through the establishment of ATW Australia.
As part of a commercial partnership between ATW Australia and FNArena, Jerry Simmons will from now on contribute regularly through video analyses in the FNArena Investor Education section. The first video posted here records a “subscribers” only “Strategic Prep” given on 25 October 2010. In it, Simmons analyses the AUD/USD pair, the DXY (Dollar Index) and the EUR/USD pair, but predominantly the AUD/USD. (The video has been added as a downloadable file in the FNArena Investor Education section as its duration is 45 minutes. Scroll down to Series 3 at https://www.fnarena.com/index2.cfm?type=dsp_minc_education)
FNArena welcomes Jerry Simmons as a highly valued contributor to its service which aims at both educating investors and assisting them with their own market analyses.
About ATW Australia
Founded in June 2010, ATW Australia is a “one-stop-shop for all a trader needs to succeed”: quality education for new traders, superb advanced trading education, fast unfiltered data, a world-leading trading platform, customer oriented competitive brokerage, quality ‘Made in the USA’ specialized trading computers, trading magazines, and the all-important psychological mentoring and coaching for traders. The trading educational products are provided by the Advanced Trading Workshop, Inc. in New York, all other services are provided by a network of partners that were chosen based on their superior products and services in their specific field of expertise. FNArena is one such partner.
To learn more visit www.advancedtradingworkshop.com.au.
