EURAUD has just confirmed a on the 1-hour timeframe.
The potential reversal zone (PRZ) is comprised of 3 ratios:
0.886 XA retracement at 1.59958
2.24 BC projection at 1.59983
2.0 alternate at 1.6004.
Stop loss is set at the 1.13 XA projection, or 1.60468.
Take profit is set at two levels, management and final.
The management level is the 0.382 AD retracement, or 1.59280.
The final level is the 0.618 AD retracement, or 1.58832.
Overall risk to reward ratio for this trade is 2.51.
Price is still on its way to the three ratios and the terminal price bar has yet to be established, but the current price is only a few pips so this is a trade to watch for soon!
Looking at major timeframe analysis, the 4-hour timeframe shows a strong resistance trendline formed since the 10th of January. The PRZ forms exactly at this trendline, serving as a further confluence of a possible reversal.
has also reached overbought territory on the 1-hour timeframe as we await the formation of the terminal price bar, indicating an overbought state of the pair.
In terms of fundamentals, make sure to watch out for Eurozone Unemployment Rate coming out! This is a high impact news release, and we are looking for a data release in order to comply with our short position. If however, the data released is such as beating expectation in a lower unemployment rate, we would want to think twice about going short on the pair. Personally, I am quite on the Eurozone's economic situation currently given various factors such as Germany's falling industrial output, but I'll still be sure to watch for the actual information to be released.
Make sure to confirm the establishment of the terminal price bar to confirm all three ratios of the PRZ before taking a trade here!
Thanks for reading,
Make sure to watch price action carefully from now on to determine whether to enter or not!
Stop loss got hit. Unemployment numbers actually beat estimates so I didn’t enter in.
Thanks everyone for following, onto the next one!