The Butterfly reversal set up I posted on 24 May was triggered when price closed below the overlap support.
I’ve outlined an approach to stop loss levels and profit objectives on the charts below for readers following this set up
The initial strategy is outlined on the chart below
- The entry on the chart at 1.6016 assumes a strategy of selling on the first close below the dashed overlap support discussed in my post on 24 May.
- The initial stop was above resistance at “B”
- The stop is now been moved to 1.6005 which is just below the last major low. A move back up past this level would represent overlap and a potential failure of the down trend
I’ve used the daily chart to show a longer view for the profit objective. This is set at around 1.5755 at the top of a Fibonacci cluster consisting of:
- 50% retracement of the last major swing up
- Projection that the move down from D will be 161.8% of the move from A up to D