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Currencies AUD Top Trade Idea For October 7th, 2013 – AUD/USD

Looking to short the audusd pair based on this possible flat pattern on the hourly chart and the reason for that is related to the 61.8% retracement level that has already been touched.

Any flat comes with a 3-3-5 structure but the key stays with the b wave. It is mandatory for the b wave to retrace above 61.8% when compared with the previous move and this condition is satisfied with the  recent highs established.

As a consequence, the two “threes” seem to be done and now expecting a five waves structure to unleash to the downside. This can be either an impulsive move or an ending diagonal and the entry level is given by the breaking of the previous corrective wave of a lower degree.

Coming to support the bearish situation is the rising trend line that is broken, now re-tested, and looking for price to be rejected out of this area. Target to the downside should be at least the previous lows in the 0.9285 area as they need to be addressed for the whole pattern to make sense. A move above 0.9457 would invalidate the whole scenario.

For the more aggressive traders, the potential move to the downside should go way below our target area and this can be traded either by trailing the profits or booking partial profits at the original target, moving the stop loss to break-even and let the rest travel the whole yard until around 0.9300-0.9150 area.

Ideally this whole bearish move should happen until FOMC minutes this coming  Wednesday.

Screen shot 2013-10-07 at 11.01.11 AM

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