EUR/AUD Rally Running Out of Steam

7 Comments
last
change
volume
Last Updated: 10 min ago

An emerging bearish Gartley pattern points to an opportunity to short the EUR/AUD at 1.4275. This bearish setup reflects the convergence of the 78.6% XA fib retracement, and 161.8% ABCD extension with near perfect convergence. The anticipated target of 1.4113  sits just above 61.8% of the projected CD leg, and stop-loss will be set at 1.4335 just above 88% of XA (also just above previous top prior to point X). More aggressive traders may note that prices are currently testing initial pattern completion/resistance near 1.4220 based on 61.8% XA, 161.8% BC and 127.2% ABCD convergence. A move below point C at 1.40 will invalidate pending trade parameters.

Potential Strategy : Sell if prices rally to 1.4275 risking 1.4335 targeting 1.4113.

Comments (7)

NeoFX
June 25, 2010 at 12:02 AM ET
there's a bit too much momentum.

I'm in but I really feel like getting out lol......I'll put a tight stop on this that's for sure.
Willie
June 25, 2010 at 03:13 AM ET
It seems to me that the headline "running out of steam" is misleading. You are not a momentum trader, but a geometric pattern trader. "Running out of steam" can only be expressed by you as a *potential", therefore. "Might be ready to run out of steam" I could accept, in other words. Some of the graphics, and some of the headlines, leave a lot to be desired.
FXTrillionaire
June 25, 2010 at 08:26 AM ET
I think most people realize that there is an implied "might" in every analyst report. You don't see the Goldman analysts write "IBM Price Target: $140 (maybe)"

Obviously everything any analyst says should be taken with a grain of salt; equally obviously, no analyst is going to title a report like "EUR/AUD May be Running Out of Steam...If I'm right"
Demax
June 25, 2010 at 09:19 AM ET
Looks academic now to me.
I missed it - D' was the entry, D(old) has been exceeded (down) already.
Nice one Roger - hope it matures according to plan. I was afk , but let's face it:

[No excuses]

Next bus please...
NeoFX
June 25, 2010 at 04:21 PM ET
Roger,

how come you chose the 61.8% ret level at 1.4113 as your profit target here?

don't you guys usually exit at the 38% of CD?

why is it different here?

thanks
rstojsic
June 26, 2010 at 01:24 PM ET
I believe brad almost always exits at 38.2% of CD, but I do not. Although brad and i use the same methodology in terms of pattern recognition, we do have different ways of interpreting patterns especially in determining stops and limits. In other words, we don’t consult on our individual trade recommendations, so in that sense we have slightly different and independent styles which still, however, fit within the general confines of pattern characteristics. I base my exits on several factors primarily based on the confluence of trend and pattern development/placement across multiple timeframes. Generally speaking, I more often use 38.2% as an initial risk management level where stops are moved to break even, for example, rather than a hard target. This may result in more break-even trades, but it opens the door for far more advantageous risk/reward ratios and by extension more profitable trading in the long run. In other words, my targets vary on a case by case basis.
NeoFX
June 27, 2010 at 05:11 PM ET
fair enough...thank you!!

Add Your Comment

Please login to post a comment or sign up for an FX360® account.

TRADE IDEAS

  • Trades to Watch
  • Trades in Progress
currency trade idea
GBP/CHF
Medium term



Buy Buy at 1.4766
Stop at 1.4703
Target at 1.4861
AUD/USD
Medium term



Sell Sell at .9839
Stop at 0.9865
Target at 0.9801
USD/JPY
Medium term



Sell Sell at 80.3800
Stop at 80.63
Target at 80
currency trade idea
EUR/JPY
Medium term
Opened 5/23/2012
Sell Short from 99.9000
Stop at 101.55
Target at 98.1
AUD/NZD
Medium term
Opened 5/21/2012
Sell Short from 1.2985
Stop at 1.307
Target at 1.2855
EUR/CHF
Long term
Opened 1/30/2012
Buy Long from 1.2055
Stop at 1.199
Target at 1.2225
These are hypothetical trades and should not be relied upon as a substitute for independent research.

MARKET NEWS ALERTS

Receive daily commentary, technical analysis reports and potential strategies from Kathy Lien, Boris Schlossberg, David Morrision and their team of technical analysts.
  • Your first name:
  • Your last name:
Your email address:




Already getting alerts but don't have a FX360 account? Manage your subscriptions by creating an account now.

Already have an account? Manage your subscription here.

CENTRAL BANK RATES