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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
Click here to get access to the same charts I use.
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I’ve discussed the EURAUD a few times in recent weeks. First was on June 20th followed by the last two weekly forecasts.
The reason it remains at the top of my watch list despite the lack of activity has everything to do with the potential 1,000 pip head and shoulders pattern.
While it’s far from confirmed, the pending structure is nearing its final stage of completion. And with an objective that stretches 1,400 pips from current levels, it’s well worth keeping an eye on.
However, just because the pattern isn’t confirmed doesn’t mean we can’t monitor for possible entry points. In fact, front running a pending reversal pattern of this magnitude can be incredibly profitable and help to ease the fear of missing out if it does begin to trend lower.
One level I’m monitoring is the short-term trend line that extends from the June low. I pointed it out on Sunday as one to watch and is best viewed on the 4-hour time frame.
You can even see how the pair caught a bid from this level at 1.5740 during the July 4th session. Of course, because it’s an ascending level the support area is now closer to 1.5800.
If sellers can manage a close below this level over the coming sessions, the completion of the right shoulder will be that much closer. It could also offer an opportunity to front run an eventual break below the neckline near 1.5340.
You could also take profit in that area; the choice is yours and depends on your style and preferred holding period among other things. On that note, if the EURAUD is gearing up for a 1,000+ pip reversal, it will likely take the remainder of 2018 and then some for sellers to see it through.
On the other hand, if buyers push prices above recent highs at 1.5880 and begin to challenge the current 2018 highs near 1.6100, we can forget about the reversal pattern altogether.
See this post to view the pending head and shoulders pattern I referred to above.
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