Top Trade Idea For November 21st, 2014 – EUR/AUD
The Euro is forming a Gartley 222 pattern against the Aussie Dollar. The Gartley is a 3 part correction “A” to “B”; “B” to “C” and finally “C” up to “D”. The move being corrected is usually labelled XA
In this case the CD swing has arrived at a 78.6% Fibonacci correction of XA
My trade idea is to look at selling if this retracement level is rejected by the daily candles beginning to make lower highs and lower lows. As things currently stand, today’s candle certainly looks as though it will do this. However, it may pay to wait until later in the day to make sure the candle does not end up moving higher than yesterday’s. If that happens there would be no rejection of the resistance.
If EURAUD falls to the 61.8% or 78.6% Fibonacci retracement levels of the last major upswing, it could complete a larger Gartley buy pattern. These levels are circled on the chart below and might serve as objectives to build trading strategies around.
About Ric Spooner
Ric Spooner is Chief Market Analyst at CMC Markets in Sydney. He has over 30 years experience in derivates markets, and was previously a Managing Director at Sydney Futures Exchange Clearing, General Manager at JBWere Futures and Manager at Elders Futures.