EURAUD (1D) - watch zone or kill zone.

FX:EURAUD   Euro / Australian Dollar
It looks like some sort of head and shoulders . The momentum of price coming off the head was indicative of some follow through below the base and that has happened.

Price has done the expected: ducking under the base and then popping back up for a retest.

I just draw it like I find it, connecting what I see as the main points. I can never know if the market will approve or disapprove what I see, until much later on.

The situation is getting ripe for a controlled loss in a short position. It could be right now or much later on. But H and S theory says we should wait for the retest to be complete. The trouble is you don't really know when the retest has been completed.

Sound traders do more watching and planning than trading. I don't know if my watch zone is accurate. How would I know?

I don't normally play 1D time frames, so in this scenario - which is obviously for a short setup - I'd be looking for a consistent ATR trend on 30 min to 1 hour time frame, to develop south.

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