Currencies » Australian $ - daily bullish - 7628

on Monday the AUD elected a daily bullish reversal at 7628. It rallied only 0.3% from the close of Thuesday, up until now. This is really not much and I'm curious to see if there will be a new high today or tomorrow. According to Martin's reversals rules there is still a chance that a new high will be made this week (up to 3 time units after the election of a reversal).
I'm not that optimistic though that a new high will be made since the USD-Index went up quite a bit and also from other reversals I know that the first time-unit of a reversal is the most important.
With daily reversals I don't have that much experience, so maybe it's different here.
One more comment: after a reversal is elected, sometimes the reversal is retested (1% rule - see MA video). Although the close was 0.7% above the reversal, maybe yesterdays decline is still only a retest of the reversal. We shall see...

The conclusion of the reversal is:

- it did retest the reversal twice on a daily basis, even though the reversal was not exceeded with more that the 1% mentioned by Martin. It did close 0.7% above the reversal
- all 3 days after the reversal was elected had new highs
- depending on when the trade has been entered, one could have made ~0.5% profit on closing basis or roundabout 1% - 1.4% considering the retest of the reversal


So to me the reversal was a bit choppy, but still a good one. I made only 0.4% profit, probably being a bit too cautious.

daily chart

The A$ is now hitting a resistance level, 78.19 and 78.20 weekly and monthly bullish.
This week is a turning point according to MA and that should mean that a high is made this week and it may then turn downwards.
It's a similar situation as with Gold when Gold had a 3 month reaction rally into March. A$ also had a 3 month reaction rally and now should be the point where it's decided whether it will further rally with the election of the monthly /weekly bullish or weakness returns and it goes back down (which is likely according to MA).
This seems to be a good opportunity for an entry-point.
The fully story is in this MA article

the A$ has done what it was supposed to do (moved down unter 72) , according to Martin and his reversals. This played out very well . Now this week there is a turning point (I would say) and a directional change. It should mean a reaction to the upside.
The question is though, has something changed in the array in the last 2 month? I would say, possibly yes. Would Martin tell us? Probably not because the A$ is was not mentioned very often by Martin in the Blog.