Hi everyone,

One potentially useful aspect of technical analysis is that it can provide a reason to love the unloved.

In that context, I thought the hourly chart of EUR:AUD was worth drawing to readers' attention as an example of a potential ABC buy set up as we approach an interesting round of bond auctions later today

I've begun with a daily chart. This shows price testing a well established support area. The stochastic is also down in the oversold area which supports a buy set up in the shorter time frame chart

If the hourly chart rejects the Fib cluster it is now at, this would be a common entry strategy under an ABC or Gartley buy set up. To reject this level price needs to make a trend trough at or close to the Fib cluster zone.

This Fib cluster consists of:

  • 61.8% retracement of O to X
  • Projects B/C will be 61.8% of X/A
  • Projects B/C will be 127% of the minor A/B correction

If there is a set up a stop could be placed  just behind the low of the candle making the trough.

Cheers

Ric