Daily Price Action
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EURAUD: Keep an Eye on This Trend Line

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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.

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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EURAUD 4-hour chart with trend line

Leave a Comment:

11 comments
Andre Dix says

Hi Justin. Have been following you last 3 weeks after 18 months of trying indicators, cluttering my charts and believing Forex was a get rich quick scheme. So now I read most of the time (including your site) and practice ALOT of patience on the longer timeframes.

Reply
    Justin Bennett says

    Cheers.

    Reply
Rexona says

I think never it is so

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Rexona says

Do you know fundamentals are very much important for price action.

Reply
    Justin Bennett says

    If you’re a fundamental trader, sure, they’re important.

    For the way I trade, everything I need to know is on the chart.

    Reply
Hlapolosa says

Rexona, what do mean, can you explain?

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Andre Dix says

Fundamentals are important, yes and on longer timeframes, like one day candles or more. But do not believe in trading news items, it feels more like taking a chance and more like gambling. Trade using a hybrid model using Fundamentals but more emphasis on the Technicals. At the end of the day market movements as with most things in life repeat themselves in the form of patterns and mathematics.

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Hatinder says

Thanks sir
It is worth watching
Thanks for update

Reply
Amr says

Isyour setup swing or short term setup

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Bestyways says

The signal analysis is very helpful. Thanks.

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Koen says

Hello Justin,

The price did in fact break below the trendline.
If I look at the chart now, the best trade opportunity would have been an entry below 1.5788, stoploss above 1.5816 and PT #1 at 1.5720 (RR of 2).

Is this how you would have played this out?
Where would you have your entry, stoploss and take profit target?

Thanks!

Kind regards, K

Reply
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