Daily: today price action so far looks like printing reversal hammer candle at the Kumo support, but of course closing is everything. Slow Stoch still overbought, MACD histogram started to decrease. If the trend holds, the cross will likely retest the previous low, which with a stop at 1,4550 provides a 2,70 risk/reward.
4 Hrs: Double top at Key resistance? Inner trendline break? Price is about to cross below Kijun Sen. Slow Stoch turning down, DMI lines closing in. For the bearish momentum to gin power Price will also have to break below 1,4178, which is now the lower resistance: horizontal key level, Kumo and 100 WMA on 4 Hrs, also Kijun Sen is there on Daily chart. That break would have a minimum measured tgt at 1,38 from the double top pattern.
A break above the cloud and especially above the 1,4550 key level would invalidate the trade idea.
Comments
Kumowizard
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This trade seems lost it's validity. Price poped above trendline and above Kumo. It may pull back down, but it is doesn't look bearish at all. AUD is sufferring. Forget this EURAUD short for now.
KleinerWicht
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Hi!
I Have a question too this analysis....
Did you use divergences of indicators in your analysis, or did they have any relevance for you?
I see some of them which would support this thesis, but you have not mentioned them in the description.
Finally I have pretty the same opinion of EURAUD!
Cheers!
Kumowizard
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Hi,
Divergencies sometimes I pay attention to, but sometimes they can persist for long long time. Just look at SP500 index :-). What kind of divergences do you see in case of EURAUD now pls?
Primarely I use Ichimoku itself to describe Key support and resistance levels, where I start to watch price action and where I start to look for more signals on the lower, in my case the 4Hrs time frame. I also use Ichimoku as primary indicator for entry and exit.
Only as additional I use Slow Stoch, MACD and DMI to get some more confirmation and to see warning signals in time. Although I have to add, that these classic indicators confuse me sometimes, for example in case of EURUSD they signalled twice a possible correction which has not yet happened.
To be honest pure Ichimoku followers do not even use any other indicators. I have to say they are probably right. Ichimoku is very efficient if you have a proper consistent trading style, including money management, mental control and patience (psychology) and some simple trading strategy, trading plan to follow (rules for entries, exits, stops, etc.)
Do you want a confession? Most of my problems still coming from being inpatient sometimes.
KleinerWicht
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Hi!
You are right the SP500 is confusing, for me it is a pretty nasty and ugly trend.
But with counter trend divergences you need to be very careful.
EURAUD:
Daily: We have there higher highs in the Stochastic and MACD(Histogram and MACD-itself). The last high in the daily is lower or you can maybe consider it as a double top. So we have a hidden-bear divergence in two indicators.
H4: There we have a higher close/higher high, which is not confirmed by the Stochastic. The DMI+ is beaten down too. If you add the MACD there, the same picture.
So we have in two major time frames bearish divergences!
My result: If we wont get a major news event which is going to bust the price over the 1,446 - 4,45397 area, lower prices are likely. The amount of divergences leads for me to the conclusion that the move from 1,38048 to
1,44208 is not sustainable.
On the chart I have normally only the Ichimoku-System and I use MACD-Divergences to confirm my Ichimoku-Signal. In 90% of cases: no divergence - no trade.
But with out discipline the best signal is nothing.......
I have to admit, I consider myself still as a apprentice of the market! ;)