A fortnight ago I made the case for a higher AUD/USD in A Contrarian's AUD/USD. This morning, the pair has pierced the neckline of the reverse head and shoulders formation, and the MACD has crossed, giving a buy signal. Where to from here?
The AUD/USD has just moved through the 38.2% retracement of the fall from 0.9750. One of the reasons I favour H&S trades is the ability to place a tight stop loss, in case of a false break. Note how the retracement levels co-incide with the support/resistance levels of the move down. With two potential target levels, I'll split my trade in two: