On the larger 4hr timeframe chart, I see two things happening. First, there is a potential head & shoulders pattern forming. Second, the neckline of the H&S pattern is exactly at a major pivotal support/resistance zone of 1.5000. Based on this pattern, I am looking for a suitable location to go short. Where is the ideal location? The price action is offering some clues.
In the chart below, I see a smaller inverted H&S pattern. This is a 330pips inverted H&S. If I use a 1:1 price target for the inverted H&S, the price objective comes to 1.5650. Furthermore, 1.5650 is also the 78.6% FIB retracement, thereby lending stronger weight to the success of this trade.
SHORT EURAUD 1.5650
SL 50pips
TP 1.5000
In the chart below, I see a smaller inverted H&S pattern. This is a 330pips inverted H&S. If I use a 1:1 price target for the inverted H&S, the price objective comes to 1.5650. Furthermore, 1.5650 is also the 78.6% FIB retracement, thereby lending stronger weight to the success of this trade.
SHORT EURAUD 1.5650
SL 50pips
TP 1.5000