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.
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.