FX:EURAUD Euro Fx/Australian Dollar
When is overextended and diverging from price and Fisher it's a sign of a top or bottom, a reliable confirmation is when Fisher forms a sharp point and turns down. Currently candlestick price action is , below the 10 ma, below the .236 Fib. level and all TRIXs are pointing down. Near term price target is at trend line support, failure to hold could see EurAud fall to the .382 Fib level...... Indicator patterns and divergences must be confirmed by candlestick reversal patterns.
@AncientM the idea behind this chart is to show how tops or bottoms form using the Fisher- Trix system, but sometimes tops or bottoms patterns may just be small corrections from overbought or oversold conditions.In the case of EurAud this topping pattern is most likely just a short term correction.It might not be the time to short since the main trend is up but at least it would have been a good idea to take profit if you are a short term swing trader.Here is a sample chart of a bottoming pattern according to the Fisher-Trix system rules.