AUD:USD – bullish reversal set up

Hi,

The Aussie looks positioned for a bullish Gartley set up if the “risk on” sentiment carries through for the rest of this session and we get a firm close to today’s candle

I’ve outlined the set up on the charts below

The first chart below is the weekly showing the entire rally since the 2008 low. If the current downtrend doesn’t overlap below the last major peak labelled “1” ,the odds favour  the major uptrend maintaining its strong, impulsive character.

The stochastic oscillator on the weekly chart is also poised to trend upward out of the oversold zone if a rally gets under way in the near future.  

AUD:USD Weekly. Source: Bloomberg

The daily chart below outlines the potential ABC correction. Price has arrived at a Fibonacci cluster which has the potential to represent the end point of the current downtrend. The cluster consists of:

  • 50% retracement of the last major swing up and
  • A projection that the swing down to C will be the same size as the initial corrective swing down to A

    AUD:USD - Daily. Source: Bloomberg

One way of handling the entry strategy is to buy on the first close above yesterday’s high provided the stochastics are trending up on the weekly chart by then. This would be a potential confirmation that price has rejected the Fib cluster zone.

 The initial stop can be placed just under the recent low which represents attractive risk:reward if the major uptrend resumes from here and moves past the high at 1.108

Cheers

Ric

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Forex, Market, Trading. Bookmark the permalink.

4 Responses to AUD:USD – bullish reversal set up

  1. daveold says:

    Nice one Ric, if we ignore the current fundamentals 🙂

    • Ric Spooner says:

      Hi Dave,

      I know what you mean. Weekly stochastic was still trending down at the close which kept me out of the set up at this stage. Might be better for the nerves in the circumstances.

  2. DV4 says:

    Hi Ric, thought you may be interested to have a look at copper futures daily and weekly chart, I think there is a gartley on the daily at a key multi-year weekly support level + fib cluster (38%/61.8%) + all indicators on both time frames turning from oversold + high volume + a 3river morning star candle pattern on the daily right now. Similar thing on other metals

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