In this analysis I will be covering two pairs, GBP/USD and AUD/USD. If you want to see my support and resistance areas for these pairs please check out the support and resistance areas section.
Also, as of last week I have finished trading for the year. Usually, if I meet my minimum yearly target I take the last few weeks of December off.
I will still be watching my charts but I will most likely not take a trade. However, if a see a picture perfect set up I may be tempted to jump in.
The 1.5720 support area acted very well as resistance last week. Price is currently forming on it but the preceding trend is a little too small so I wont be trading it. However, if price moves away from the 1.5720 and then comes back down, I might take a long reversal. Also, if price moves below the 1.5720 by a significant amount and then back up, I will use it as resistance for a short reversal.
I am also closely watching the 1.5620 and 1.5540 levels for indecision if price moves down there.
For short trades I am watching the 1.5820 level. When price pushed down to this level on the 7th of November it got turned around very quickly. Since then, buyers have found it hard to reach the 1.5820. If price moves up to the 1.5820 I will be watching closely for indecision so I can take a short reversal.
I am also watching the 1.5910 for short reversals.
At the moment AUD/USD is hitting four your lows so it is getting difficult to place support and resistance areas on this pair. Yesterday I placed the 0.8150 based on data from May 2010 and it seems like the area held well. There was even a trade from the level on the 2HR chart but I skipped it as I am finished trading for the year.
Even though the 0.8150 held, we need to remember that this support area is more than four years old. So it is not as reliable as a fresh support area. The fact that we had a recent bounce from the 0.8150 makes it much more reliable though.
The lower area at 0.8070 has has no recent bounce so this area is still risky. Please keep this in mind when trading.
I will be looking for long reversal trades from the 0.8150 and the 0.8070. As price has just moved away from the 0.8150, it will need to come back down and form indecision again before I would consider trading.
For short trades I will be watching the 0.8215 and the 0.8280. Both the 0.8215 and the 0.8280 have prove to be good support and resistance areas recently.
I hope you found this analysis useful, if you have any questions please ask using the comment form below.