Trade view /
30 September 2016 at 7:31 GMT
Still short AUD through AUDUSD, AUDJPY, and GBPAUD and letting those trades play out (hopefully)...
One interesting setup this morning is EURGBP. We are possibly making a topping formation that offers great risk/reward if the pattern breaks to the downside.
Monthly: Broken out of the corrective channel formation to the upside. However, we have stalled close to a previous area of resistance dating back to 2013. August posted a Doji style candle from the high. Reverse trendline support is seen at 0.8075 and we would not expect any correction to break this level.
Weekly: Completed a bullish five-wave pattern (Elliott Wave) while positing an Evening Star formation from the high (0.8723). This week’s price action could possibly form another Doji top.
Daily: We are looking for a possible bearish Head and Shoulders to form. This timeframe does not highlight any real confirmation as yet.
Intraday (one hour): Probably the most important timeframe for this outlook. We have seen a corrective recovery from the 0.8589 lows. Although we have stalled at the 61.8% pullback level of 0.8666, there is no clear indication that the move higher is over.
The four-hour chart will post a Demark correction nine before the afternoon session (15:00 GMT) if further gains are posted. This, coupled with the fact that we have a trend line resistance at 0.8687 and the 78.6% pullback level lining up at the same level, we prefer to sell into gains today.
Bespoke support lines up with trendline support at 0.8604 and should be a substantial barrier on the downside.
Measured move: The target for the breakout is at 0.8460:
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Source: Saxo Bank
Management and risk description
A move through 0.8604 and we place stop at entry (or double up).
Entry: selling close to 0.8685.
Time horizon: two to four sessions.
— Edited by Michael McKenna
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