BarroMetrics Views: AUDUSD Triangle? IV
I am going to continue with the AUDUSD until either the triangle completes or we see a confirmed breakout on the 5-day swing.
Figure 1 is a daily chart of the AUDUSD. If my labelling of the triangle is correct, then we should now see start a strong move down without breaching .9233. The first indication that this view is correct will be acceptance below .9115 – at least on the daily chart. But the 60-minute is offering a higher entry point.
Figure 2 is a 60-minute chart. The chart shows two ideas:
- The .9153 level was the start of a directional move following Non-Farm Payrolls. A breach of that level will reinforce an Upthrust Changing Trend Pattern on the 60–minutes. This will trigger a line change in the 240-minutes; that line change price is currently at .9126. Close enough to .9115 to say that if we see .9126, we’ll probably see a test of .9115.
- In addition, breach of .9153 will constitute a ‘failed IPM (a new directional move)’. Such a breach usually means a strong move in the direction of the breach that sends prices down to the next support level, in this case .9115.
Given the context, and given the presence of the two factors, I am willing to risk on this idea: that acceptance below .9153 will mean acceptance below .9153.
How will my triangle idea be proven wrong?
Acceptance above .9233 will invalidate my triangle idea.
Normally I like to see a breach of ‘A’ before giving up on the triangle (in this case ‘A’ = .9318); I look at ‘A’ as the ‘make or break’ because what I have labelled ‘C’ may just be the first wave of the ‘C’, and so, what I have labelled ‘E’ could turn out to be ‘C’. However, in this case, given the size of the triangle, I rate this alternate labelling as a low probability event.
If the triangle scenario holds valid, the most conservative entry would be to wait for acceptance below .9115. An alternative entry would be acceptance below .9153. In either case my stop would be above 9233.
The target for the move would be in the .8413 to .8065 (the monthly Primary Buy Zone – Figure 3)
FIGURE 1 AUDUSD Daily
FIGURE 2 AUDUSD 60-minute
FIGURE 3 AUDUSD 12-Period Swing Monthly