Complex corrective wave for the audusd pair and from my point of view this is a triple combination and these kind of patterns are usually the leg of a contracting triangle of a bigger degree.
What
is interesting is the fact that triple combinations are always ending with a
contracting triangle to act as a reversal pattern and this means previous trend
(the downtrend) will be reversed.
Also
another clue that we are in a triangle that should break higher after completion
is the fact that for this last wave a purple price is forming a truncated zigzag
and this pattern is retraced minimum 81% so you can imagine the covering
there.
Our
recommendation would be to close any longs into the 0.9340 area, without waiting
for the 81% retracement to come, as this would be only the b wave pink to the
upside and then just wait for 0.90 to come over and over again and buy that area
for the triangle to break higher or for the d wave to come.
We
should then look at how the b-d trend line respects the time element but
normally the triangle should break higher with the e wave to take less than the
time taken for the previous d wave to form.
End
of the triangle should be below previous corrective wave (0.8997) so every time
0.90 is coming just go long with stop loss 0.8662 and having a final target a
move towards parity.
I
know everyone is bearish on the audusd but this is the whole beauty of technical
analysis: it allows one to have a contrarian opinion.
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