A perfect set up is being displayed in the AUD/USD chart
The set up started more than a year ago in July 2020.
Forming a head and shoulder with almost identical shoulders.
Everything in the set up has been going perfectly, this pattern is also obvious in the weekly chart.
It is typical for the bars to re-test the neckline which adds more credibility to the pattern.
Just as planned, the price is flirting with the neckline, Monday's bar should confirm the rejection.
(Remember, wait for a clear rejection, ie bearish engulfing or similar)
If price breaks above neckline, it will be a bullish sentiment.
The RSI further confirms it, to me it looks more like a retracement rather than a divergence.
Although there is a support region around 0.7000, it does not seem significant given the strength of the pattern. (18 months)
Trade profits a great 6:1 ratio (TP/SL). The TP is obtained by projecting the height of the head from the neckline and reflecting it downwards. Set the stop-loss slightly above the neckline to weather any spikes from news.
It is rare for such perfect set ups to be present in the daily and weekly charts. Don't miss in.
In addition to the technical analysis, the Aussie dollar looks sluggish due to the economy and current relationship with China.
Happy trading and share your comments! :)
The set up started more than a year ago in July 2020.
Forming a head and shoulder with almost identical shoulders.
Everything in the set up has been going perfectly, this pattern is also obvious in the weekly chart.
It is typical for the bars to re-test the neckline which adds more credibility to the pattern.
Just as planned, the price is flirting with the neckline, Monday's bar should confirm the rejection.
(Remember, wait for a clear rejection, ie bearish engulfing or similar)
If price breaks above neckline, it will be a bullish sentiment.
The RSI further confirms it, to me it looks more like a retracement rather than a divergence.
Although there is a support region around 0.7000, it does not seem significant given the strength of the pattern. (18 months)
Trade profits a great 6:1 ratio (TP/SL). The TP is obtained by projecting the height of the head from the neckline and reflecting it downwards. Set the stop-loss slightly above the neckline to weather any spikes from news.
It is rare for such perfect set ups to be present in the daily and weekly charts. Don't miss in.
In addition to the technical analysis, the Aussie dollar looks sluggish due to the economy and current relationship with China.
Happy trading and share your comments! :)