Selling EUR: AUD

Euro: Aussie is parked at a Fibonacci cluster zone. Failure at this level, with a weak close by today’s candle, could be a sell set up.

Daily Chart

EUR: AUD CFD - Source; CMC Tracker

EUR: AUD CFD – Source; CMC Tracker

The end of an “abc” correction often sees the beginning of a new downtrend.

The Fibonacci cluster shown on the chart consists of:

  • The 50% retracement level for the whole of the last major swing lower and
  • A projection that the swing up to “c” will be the same size as the swing up to “a” (100%)

Failure at this cluster may indicate the end of this correction. This could set up for a move below support at 1.2220.

One approach to entry would be to sell on a close under yesterday’s low (shown by the arrow). A stop could be placed just above the peak at “c”.

This approach assumes today’s candle doesn’t move above yesterday’s high.

If that happens there would be no trend peak at this level and so no setup at today’s close.

If price only nudged above yesterday’s high, we may yet get a peak near enough to the cluster level to provide a set up in the next couple of days. However, a clear move above yesterday’s high would cancel any setup around this cluster level.

About Ric Spooner

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

2 Responses to Selling EUR: AUD

  1. John says:

    Hi Ric

    Just a beginners question – when you say ‘close by today’s candle’, I assume you are referring to a specific time. Does it refer to the close of the ASX today, midnight tonight or an international time such as NYSE close?

    Cheers

    John

    • Ric Spooner says:

      Hi John,

      The FX day ends at 5pm New York or 10pm London time. At the moment this is 7am Sydney time.
      One aspect of this type of strategy is that it can be quite convenient from a time management point of view. No need to be constantly monitoring the market. Just check things early in the morning and go from there
      Cheers
      Ric

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