Trend line set back in August through September intact and respected.

EUR/AUD Setting up with defined risk parameters and attractive reward to risk ratio.

EUR/AUD

Indicator and signals clustering = points EUR/AUD to upside before any major falls.

Key Points:

  • Price holding above the 200 EMA
  • Price holding above the 50 EMA
  • Price sitting on 200 EMA clusters with 50% Fibonacci as support
  • RSI approaching 50 mid-point and has room to cross above.
  • Holding above trend line we can use as reference for exits
  • A bounce off trend line would cluster with 61.8% Fibonacci
  • Target 3 is the 61.8% retracement of August High to September Low

Key Levels:

Support – 200 EMA, 50 EMA, 1.62675, 1.62370

Resistance – 1.63280, 1.63530, 1.63980

Entry Zone:

Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.

Optimal Entry – 1.62590

Supporting Entry – 1.62680

Candle Reversals for entry

  • Bullish Hammer
  • Bullish Engulfing
  • Bullish PiercingBullish Candlesticks

The Risk:

As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.

If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.

IF: Price breaks below 1.62309 and violates the trend line – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.

Reward / Reward Targets:

Optimal Entry 1.62590 – Target 1 1.63280 = 2.5x Reward to Risk

Optimal Entry 1.62590 – Target 2 1.63530 = 3.5x Reward to Risk

Optimal Entry 1.62590 – Target 3 1.63980 = 5x Reward to Risk

 

Supporting Entry 1.62680 – Target 1 1.63280 = 1.65x Reward to Risk

Supporting Entry 1.62680 – Target 2 1.63280 = 2.2x Reward to Risk

Supporting Entry 1.62680 – Target 3 1.63280 = 3.5x Reward to Risk