EUR/AUD Sell Opportunity Emerging

Last updated 12/21/2009 2:42 PM EST (GMT -5) 0 Comments - Add your comment

FX360 Technical Analyst Staff

Technical Analyst, GFT

The EUR/AUD is showing solid near-term resistance near 163.50 based on an emerging 1hr bearish Gartley pattern projected to complete near the point D on the chart below based on the following Fibonacci/pattern convergence:

The key will be for prices to rally to our projected entry at 1.6330 without first moving below point C (1.6055) which negates pattern structure and invalidates this particular setup. Additionally, any gaps and/or wide-ranging candles (2-3x's average) prior to the projected entry (even if the high at point C holds) may invalidate this trade as they are signs that a continuation move may be in progress.

The initial profit target of 1.6255 (T1) represents 38.2% of the projected CD leg at which point stops will be moved to break even, and the final target of 1.6184 (T2) sits above 61.8% of CD. Stop-loss will be placed just above 61.8% of XA.

Potential strategy: Sell if prices rally to 1.6330 with stop-loss at 1.6381 targeting 1.6255 (T1, stop to break even), 1.6184 (T2).

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