AUDNZD 4h Head & Shoulder opportunity

[Lifesong]

It is just past 12:00 GMT and 4h chart of AUDNZD is looking promising for Head & Shoulder opportunity that could be developing (see chart)

My take on this chart is if 1.2750 level breaks we are heading for at least 1.2570 level which is H&S target, also confirmed by Fib expansion (1.618) and this was swing low of Feb 23rd as well. The daily TRSI is looking to cross down, but the 4h TRSI is already down. All of this is happening after double top was formed on Weekly chart @ 1.2960-30 levels, which also gives, me more confidence in the trade once 1.2750 breaks.

My trading strategy would be FIBMASTER's breakout strategy (see free lesson ) - perhaps you'll have to register FREE to access the video!!

If the trade plays out according to plan I'll trade two lots with short term P1 @ 1.2570 and longer term P2 @ 1.24 level (previous swing low) or even down to 1.2150-1.2200 first real SK support on Daily chart .

Happy trading and any comments are appreciated.

[toyogo00]

My take on this chart is if 1.2750 level breaks we are heading for at least 1.2570 level which is H&S target, also confirmed by Fib expansion (1.618) and this was swing low of Feb 23rd as well. The daily TRSI is looking to cross down, but the 4h TRSI is already down. All of this is happening after double top was formed on Weekly chart @ 1.2960-30 levels, which also gives, me more confidence in the trade once 1.2750 breaks.

My trading strategy would be FIBMASTER's breakout strategy (see free lesson ) - perhaps you'll have to register FREE to access the video!!

If the trade plays out according to plan I'll trade two lots with short term P1 @ 1.2570 and longer term P2 @ 1.24 level (previous swing low) or even down to 1.2150-1.2200 first real SK support on Daily chart .

Hi,

The weekly double top is very strong. The 4 hourly chart definitely shows a good formation of H&S with neck line around 1.2775. The only problem is the chart has "almost" 100% retracement on every bars on the lower time frame (1 hourly or 30mins). If you want to apply the break out strategy stated in the Fibmaster's lesson, you may have to tolerate it. Furthermore, the spread of this pair is about 8-12pips!

Thus it is better to trade on higher time frame - weekly, daily and 4hrly.

Regards,
Toyogo

[toyogo00]

Hi,

The weekly double top is very strong. The 4 hourly chart definitely shows a good formation of H&S with neck line around 1.2775. The only problem is the chart has "almost" 100% retracement on every bars on the lower time frame (1 hourly or 30mins). If you want to apply the break out strategy stated in the Fibmaster's lesson, you may have to tolerate it. Furthermore, the spread of this pair is about 8-12pips!

Thus it is better to trade on higher time frame - weekly, daily and 4hrly.

Regards,
Toyogo

[Raj]

Guys, try shorting the RS next time...you'd already be in the trade up about 100 pips almost...look for RS close to the LS price, and some more convergences would be a fib level, and in this case the backside of the up trend line also helped to act as resistance.

Happy Trading

[Lifesong]

Hi Neal

Any suggestions on this pair from a longer term perspective (swing trade on 4h chart)?

My summary:

Weekly: double top & TRSI down
Daily: TRSI down strongly & Fib expansion (2.618) from top formation reveals target of 1.22 level. The 1.22 level is also next major SK support once clear brake of 1.24 SL is achieved.
4H: Possible pullback developing and could possibly be going back to 1.26 (previous SL & .392 retracement)

Question: Would you suggest entering short @ 1.26 (with stop above .618 retracement @1.2750) if it pulls back that far or would you rather suggest trading the brake of 1.24? Whatever scenario you propose what stop would you suggest with profit target @ 1.22?

[toyogo00]

Hi,

Weekly, daily trends are down - so it is a shorting opportunity. Currently, price has rebounded from sk support @1.2400 and is rising towards 38.2 retracement resistance @1.2630. It has presented two opportunities : continuous downtrend and breakout.

My suggestion will be:

Setup:
if the price rebounds to 1.2630 resistance, then wait for 4hr trsi to cross down (hopefully Daily trend is still down) for short entry - but beware of the support @1.2400. This is a continuous down trend setup. One way is to take profit @1.2400 and wait for the breakout for the next trade; or alternatively take partial profit @1.2400, then add on the new position if it breaks 1.2400.

If you were to wait for the price to break 1.2400, then your target pips is only (1.2400-1.2200) +200pips and you would miss the first portion of (1.2600-1.2400) +200pips.


Regards,
Toyogo

[Rob123]

Good analysis Toy.I'll be watching this one around the 2400 level.We have a strong line there (resisitance ) Also we just developed an inside bar .I'll be watching this to breach that Mc bar with a spike.Also we are on the 61.8 level at this level. Will it get that far who knows.Maybe the big boys are watching this area. But i'll be waiting patiently like a lion in the brush to pounce :) This is on the hourly chart.

[toyogo00]

Hi Rob,

I like your expression of "waiting patiently like a lion in the brush to pounce". You must be watching a lot of "Planet Earth" documentary series from BBC, I've a full set of it in DVD. Sad to say that human being is very impatient as compare to a lot of animals. In trading, we are really learning hard to appreciate how to become "patient"... lol!

Your being patient have paid off this time again that you are protected against the wrong entry to go short. The chart has told us that shorting is over and we just have to re-look at it and find the next opportunity!

Regards,
Toyogo

[Rob123]

Hi Toy , She just dropped like a hammer over 270 pips to the downside and i'm on the ride.

[Lifesong]

Hi Rob

Nice big catch and that one should be adding a bit of weight to your trading account!! Obviously now is the time to be cautious dependant on the timeframe you are trading and perhaps start to lock in some profit. We might see some bounce developing in the near term, because we are at SK support of 1.2145-64. The flip side is if daily & 4h momentum continues we are heading for close proximity to previous swing low, but because of the long tail (hammer bar) on Jan 12th's bar (daily) I reckon 1.20-1.19 range!

Nice work and as you rightly said being patient pays off!

[toyogo00]

Hi Rob,

What a nice drop! When 4hrly TRSI crossed down again after it reached the high of 1.2495, it has presented another shorting opportunity. I am concentrating in the EURJPY, USDJPY and AUDJPY trades with some profit - +100pips, not as large as this pair. I think I need to buy another LCD to accommodate more charts. lol!

Regards,
Toyogo

[toyogo00]

Hi,

Just check my IB a/c that this pair has 15-20pips spread, only recommend for higher time frame 1hr/4hr/daily and not for scalp on lower time frame (below 1hr).

Regards,
Toyogo

[Rob123]

Thanks guys for the feedback and maybe next week will be good for all of us. Take care,Rob

[Rob123]

365 Old school trading. 61 and 38.2 conflunece.Draw tendlines on weekly .daily and 4hr. Mark strong lines (sr) on weekly ,daily,4hr.watch for 50 and 00 to be cleared.Price action signals - morning star,engulfing candles, tweezer tops as well as inside bar fakeys. Good method around 60% to 70% hit rate.

[FibMaster]

Overall I like that setup though the recent rally had some momentum (4H chart). So need to keep that in mind. (daily trend is up, due to that)

15 minute chart shows excellent pattern of descending swing highs and lows.

What's your spread on that pair?

[Rob123]

14 spread Neil - never took off really so i closed out. This method is really good for 4 hrs and up to avoid whipsawing .Anyway not a bad week overall. Rob