Could be the beginning of shark week as a few formations are starting to present themselves across the market- on this occasion I am looking at a bearish move on the GBPAUD.
Price is approaching a level where we have seen previous support/resistance. That said, as always with this setup, there is no fixed PRZ. Reversals occur when the total retracement to the X level is between 88.6% and 113%. Furthermore, the extension from B:D must be between 161.8% and 224%. Entries for this pair are very vague and down to experience in dealing with candlesticks. Personally, before looking at candle sticks for reversals, I aim to have my entry as close to the 113% X:C extension as possible in order to bring maximum returns. Minimum entry for any trade should be at least 1:2- I prefer 1:3. A general overview of previous support/resistance can be seen in the notes below.
Looking forward to nest week, we have the release of the BoA Interest Rate (03/10) and the Australian Trade Balance (05/10). I will be keeping my eyes on these closely whilst scoping my entry point as these may well make or break this trade.
Shark ratios
A:C = 1.13:1.618
B:D = 1.618:2.618
X:D = 0.886:1.13
Price is approaching a level where we have seen previous support/resistance. That said, as always with this setup, there is no fixed PRZ. Reversals occur when the total retracement to the X level is between 88.6% and 113%. Furthermore, the extension from B:D must be between 161.8% and 224%. Entries for this pair are very vague and down to experience in dealing with candlesticks. Personally, before looking at candle sticks for reversals, I aim to have my entry as close to the 113% X:C extension as possible in order to bring maximum returns. Minimum entry for any trade should be at least 1:2- I prefer 1:3. A general overview of previous support/resistance can be seen in the notes below.
Looking forward to nest week, we have the release of the BoA Interest Rate (03/10) and the Australian Trade Balance (05/10). I will be keeping my eyes on these closely whilst scoping my entry point as these may well make or break this trade.
Shark ratios
A:C = 1.13:1.618
B:D = 1.618:2.618
X:D = 0.886:1.13
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We can see below how this PRZ has previously acted as support/resistance on the weekly time frame.
