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AUDCAD: Higher timeframe (Big Picture) vs Lower timeframe (H4 analysis)

A Common Question

One question that is often asked is “Which time frame should we follow? Big picture shows one way, H4 shows another way.”

Let’s take a look at AUDCAD with a view on this question.

Overall view on the higher time frame (Big Picture)

Current Support and Resistance levels as seen on higher time frame chart on AUDCAD

Current Support and Resistance levels as seen on higher time frame chart on AUDCAD

  • Firstly, we can start by checking for current supports and resistances and if price is near to any.
Weekly Chart of AUDCAD sees a possible 1234 pattern

Weekly Chart of AUDCAD sees a possible 1234 pattern

  • On the Weekly charts, we can see a possible 1234 pattern shaping up with price approaching a confluence of resistance made of:
    • Previous turning points
    • F7 level of Fib-R of down flow
    • Top band of equidistant channel

Question you should ask yourself at this point then is. “Is there a trigger for this big pattern yet?”

You would have answered, “No. As point 4 has not yet even finished forming” and you also would know that it would take some time yet to give a trigger as this is a higher time frame chart.

Then let’s look at the current view on H4

H4 Trend on AUDCAD is still up

H4 Trend on AUDCAD is still up

  • Week to week, trend is still up.
  • There was a previous Bullish expansion on H4 over several boxes high fitting a BigMove criteria.
  • Most recently there was a 1234 pattern which was triggered and is now moving upwards (Don’t Chase!)
    • Trigger on this pattern was based on a WR or 13TL.
    • SL for this pattern is still based on 15pips from point 4.

So, what now?

Currently price is approaching Resistance. There are 2 possible outcomes from here on.

  1. Price continues to be Bullish and clears the resistance
    • Look for price to retrace back to this resistance turned support in the form of a 1234 pattern.
  2. Price is resisted and starts to turn down.
    • Look for possible H4R criteria near the resistance which could propel price to complete and trigger the WK pattern
      • Reversal Chart Patterns,
      • Flattish H4 boxes, followed by Bearish Expansion on H4 etc.

Last time, many things that I wanted were just dreams, now I see them as possibilities. I’m looking forward to own pent-house suite in Manhattan overlooking Central Park because forex trading with Tflow® makes it possible. Find me on Google+

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One thought on “AUDCAD: Higher timeframe (Big Picture) vs Lower timeframe (H4 analysis)”

  1. Jia Hui Toh says:

    Jerome, this is very good post. Informative, yet easy to understand. Thanks.

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