Welcome in today’s Price Action setups review. We have four currency pairs – AUD/USD, EUR/USD, GBP/USD and NZD/JPY:
AUD/USD:
Aussie rebounded from the key resistance on Thursday, which creates a November 2013 high. Trend is upward here, so potential short positioning should be preceded by a clear PA signal. Deeper correction will bring the price to the nearest support and there we can look for opportunities to position long.
EUR/USD:
EUR against USD fell sharply during the session opening – later deepening the movement. Pair stopped on the support and now consolidates. It is worth looking for clear PA buy signals to play in accordance to the prevailing uptrend.
GBP/USD:
Cable rebounded slightly on Monday, but it seems still that the support should be tested before larger increases. Buy signal at this level should be used to open long positions.
NZD/JPY:
Over the weekend I wrote about buy signal, which was formed on the daily chart giving a pi-bar candle on the support. Yesterday the price fell below 50% of the candle’s abolition which gave an opportunity to open longs. Let me remind how you can react seeing such signal:
-Buying after breaking the maximum, stop loss below the minimum,
– Buying after breaking the maximum, stop loss below the 50% of candle’s abolition (better risk/reward ratio than in the first case – where the likelihood of losses is greater),
– Buy limit on 50% of candle’s abolition, stop loss below the minimum. Better risk/reward ratio than in the first case and safer SL than in the second one. There is still a risk of lack of correction – in that scenario we will be out of position and just observing the developing trend.
