By looking at charts of financial instruments we are using our technical analysis skills in conjunction with our modern day systems and indicators to provide us, as traders, with an edge in the market.
On the AUDCAD we can see we had a very nice Pro-Trading System (PTS) buy signal on the 28th of October at 9293.55. Price continued to go higher without hitting our stop; 9265.17. We reached PTS target number 1 and 2 in a short period of time. This second PTS target was around a previous pivot high (26th of September), which acted as resistance underneath price on the 12th of November.
With this impulsive move up (wave 3) after a corrective move (wave 2) down, we are still pushing higher. This provides us with higher highs and higher lows. After such an impulsive move which is our wave 3, we are expecting another corrective move as we now have moving averages underneath price. This will act as support to “stop” price from going lower. This retracement is expected to go down to previous support areas, which is marked as our Wave 4 potential.
Our PTS system has plotted a target number 3 at 9715.59, which is very nicely aligned with the potential end of our wave formation structure, marked as Wave 5.
We can clearly see that the angle of the Moving Averages are starting to show a nice 45-degree angle. This provides more confidence that more upside potential to reach that PTS target number 3 is certainly on the cards for this currency pair.
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