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Sunday, May 15, 2011

Trend for 15th of May 2011

Today I just wanted to pay your attention to two securities: aud/usd and silver. I want us to look at daily charts of both securities and try to predict a short term of the securities in the nearest future. This will of course be a technical guess as we will be looking at technical indicators and price action recently. So let me look at aud/usd first. 

A few points can be said about aud/usd. Firstly we see that the prices of the pair were in overbought level for quite a period of time and finally the correction took place. Secondly, we clearly see the traditional resistance becomes support thing come true. You should see the price sitting at a level that used to be resistance once. Now it is support. Moving average of 21 is now above the price (it closed above the price), so it could mean lower prices in the pair. RSI on daily charts is not oversold yet, so there could be a break lower and reach the support levels which I pointed out on the chart. However, there may not be a break if support holds and no negative data for Australia is released this week. I am slightly more bearish for the pair than bullish. 

However, I am more bullish for silver. Firstly, the low that was recently placed (on the 12th of May) was only slightly lower than the previous one (on the 6th of May). This also formed a divergence on RSI. As it is daily chart it is more serious than you would be looking at 4 or 8 hour charts. I also stated in my previous posts that the security has already reached oversold levels on the daily chart and I do not expect it to fall very deep anymore. From my perspective I see it as a good opportunity to buy. Of course, this is not a recommendation to do it, just my personal prediction. 

Read my previous post:

Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.