From the prior trade setups post, the AUDNZD trade setup remains in play and in positive territory, while the Palladium was stopped out for a 2 percent of capital loss.
That’s why I try to maintain at least a 2:1 reward to risk ratio, so one winning trade will yield twice the amount I would lose on a one losing trade. In other words, if I win once and lose twice I will end up breakeven.
My trade setups for today on the EURCAD and Australia 200 Stocks Index
Trade Setup One: EURCAD Broke Resistance Cluster
My earlier EURCAD short trade setup managed to reach only its first target. As the price rebounded and completed a bullish breakout above the cluster of horizontal resistance and descending trend lines. The blue shaded area on chart among 1.4715-1.4690 in addition to the main descending trend, were technically the main barriers and protectors of the short to medium term bearish trend.
Now, the price has completed a breakout above that area, hence it is highly likely that the 200 days simple moving average, which is very close to the next potential horizontal resistance at 1.4860 is going to be tested as a minimum target for the breakout.
Trade Setup Update
The price pulls back sharply today, I will be looking for the price action to confirm the breakout through a bullish 8-hour pin bar, or a double bottom on the four-hour chart before initiating a long. Otherwise, if the price re-attempt to exit back higher above the upper edge of the shaded area and fails, forming a rejection candle, it might hint it was a false breakout and I would initiate a short. Keep posted for updates.
Trade Setup Two: AUS200 Short-term Bias Turns Negative
Australia’s main stock index has broken the neckline of a short term double top formation at 6695. Meanwhile possibly completed a bearish rising wedge pattern. Suggesting we will probably see further downside in the near term towards 6600. I would be looking to short any minor upside pullback towards 6695, towards 6600 and 6525 levels.
Trade Setup Update
The index is pulling back, after forming a bearish candle but with long lower shadow, and therefore Id rather wait for the price to confirm the bearish breakout among the shaded area, than shorting directly. Keep posted for updates.
Trade with Care