It's been a bit of a busy day for blog posts but I thought the potential head and shoulder basing pattern in the Aussie was worth discussing.
The head and shoulder pattern is not actually completed unless price breaks above the neck line. This is shown on the dashed resistance line on the chart.
A standard approach to trade entry is to buy on a break above the neckline. Many traders apply a price filter, waiting for price to clear the resistance by a bit of a margin to reduce the risk of being whipsawed by false breaks.
One approach to the initial stop is to place it behind the right shoulder.
The profit objective strategy on the chart sets it at the strongest Fib cluster level above the pattern. This consists of a 78.6% retracement of the last swing down and a projection of 127% of the height of the H&S pattern from the neckline.
If price gets to the 61.8% level the stop is changed to a trailing stop but left at that level once a candle completely clears it