justatrader

EURAUD - Follow up from April's labour data

FX:EURAUD   Euro / Australian Dollar
So price didn't move much after the Aussie unemployment data was released... blame it on the stubborn Euro!!

Anyhow, the Head & Shoulders seem to be holding its ground although the target of 1.45 - 1.43 hasn't been hit yet. Current retracement could see 1.508 before dropping. If this is the case, then its a classic text book study of Support/Resistance (I've plotted the moves on the white box to the left).

A retest of the neckline usually gives a robust confirmation of the H&S target. So i'll be closely watching this pair. If a good reversal pattern forms at 1.508 - 1.505 then i'll be keen to short this pair. However, the stops for this comes in a bit further up at the right shoulder (c. 1.54 - 1.55).

Also, if the trend line is tested and confirmed it would be a beautiful trade to take on. Because we get 3 confirmations.

1. Head & Shoulders
2. Past support turns resistance
3. Price respects the downward trend line

So for now, just keep an eye out on EURAUD             ... and AUDUSD             .. one of these two will clue you into Aussie strength or weakness.
Trade plan: Don't short at the level blindly. Wait for the first candle to take out the price level of interest. Wait for another candle or two and see if there is any bearish sentiment and then short. Especially look for interaction with the sloping trend line
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