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EURAUD Reaches Target; Offers Second Chance Opportunity

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The EURAUD hit my target yesterday in the 1.3900 region. I had entered short at 1.4097 following Monday’s commentary which included the false break of 1.4090 coupled with a bearish engulfing day.

I exited at 1.3907 as this was the spot of yesterday’s retest of 4-hour channel support which I also mentioned on Monday. So, in the end, it was a 190 pip gain.

However, for those who missed the initial entry, the ascending channel you see below could offer a second opportunity. Channels that form against the grain such as this tend to break with the current long-term trend which has been bearish for nearly two years.

When and where it will break is anyone’s guess. But that’s irrelevant as far as I’m concerned because my approach will be the same regardless.

A 4-hour close below channel support would expose the multi-year low at 1.3680. This is the 2015 low and is also the region that attracted a flurry of bids last month.

Alternatively, a move higher would likely encounter sellers near the 1.4090 area. And although such a retest could produce a sell signal, I’ve learned that it’s usually best to wait for a clear break of support.

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EURAUD 4-hour channel

Leave a Comment:

10 comments
Al says

What was your R multiple on this one Justin?

Reply
    Justin Bennett says

    Al, it was a 3R trade. My stop was up near 1.4160.

    Reply
Raj Jadeja says

Superb commentary Justin.

Raj

Reply
Jan says

Hi Justin, thanks for this report

Can I ask why did you enter at 4097? And why not at the break of the low?

Btw you mentioned a couple of times you take 3-10 trades a month. Is this the type of trade you are making you money from?

Thanks for your time:)

Reply
    Justin Bennett says

    Jan, I liked what I saw in that area. Yes, this trade was very profitable considering the time it took to play out.

    Reply
Jan says

One more question Justin

This trade was 1:3

How do you usually manage your trades?
Are you moving to BE when the trade is at 1:1?

Reply
    Justin Bennett says

    Jan, it all depends on the trade. The market conditions dictate how and when I trail my stop.

    Reply
Thinh says

Hello Justin
price retested channel support line so is it possible to entry a short position again?
Thank you!

Reply
    Justin Bennett says

    That’s a decision you have to make.

    Reply
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