Friday, the daily chart for EURAUD painted a bearish engulfing candlestick. While forming at the 78.6 fib retracement in a daily downtrend, I am anticipating price to continue forming Lower Lows. Taking a position at market open would be an aggressive entry. I will more than likely be waiting for a break of the phase line before taking a short position.
Daily PA has formed a head and shoulders with heavy divergence in line with monthly resistance 1.415 and the descending TL. This is a POTENTIAL setup because price has not yet put in a lower low. Wait for price to break the CTL before entering short. Stops above the right shoulder with profits at weekly support, 0%, and -27% fib extension
US Dollar Index broke out of the ascending inner TL after forming a head and shoulder pattern on the daily timeframe. With Weekly MA cross-over as well, we could see a short term bearish pullback in the dollar. Pay attention as price reaches the neckline as it will come in contact with the ascending outer TL as well.