AUD/USD is sitting on a major reversal spot. According to the theory there is a 80% chance of this pattern playing out. Importantly there is both time and price symmetry in this pattern.
From a market psychology point, this is the ultimate contrarian trade: China stock market got sold off, so the press says that has led to a AUD sell-off, Bloomberg article says Aussie recession is here, commodities are down and everyone hates them. Everyone believes USD is king and is set to rule over all till......you know the story.
The patters in a classic Gartley-222 reversal:
There is an AB=CD patters
The AD move is .707 of XA
BC move fits nicely into a .382 retracement
Time periods and their Fib symmetry are as follows:
XA = 143 weeks
AB = 106 weeks
BC = 11 weeks
CD = 89 weeks (I expect a new low next week around 75 cts or just below when the stop hunt kicks in on Monday (Greferendum) or Tuesday after RBA rate announcement)
AD time period = 206 weeks
XA = 143 weeks is .707 times of 206 weeks = AD
Price reversal is also @ .707 mark
So Price and time symmetry (in an inverse fashion)
AB divided by BC and the result squared
106 / 89 = 0.8396 if you square this number you will get = 0.705 (or say .707 - reversal point)
Positive divergence:
All the technical indicators in any time frame is portraying positive divergence.
If the pattern fails, then it's curtains for the Aussie...see you at the next stop @ sub 50 cts.
Note:
Details of the gartley-222 are described best by Larry Pesavento in his book Fibonacci Ratios with Pattern Recognition, look-up page 56.
Best to all
TrVic
From a market psychology point, this is the ultimate contrarian trade: China stock market got sold off, so the press says that has led to a AUD sell-off, Bloomberg article says Aussie recession is here, commodities are down and everyone hates them. Everyone believes USD is king and is set to rule over all till......you know the story.
The patters in a classic Gartley-222 reversal:
There is an AB=CD patters
The AD move is .707 of XA
BC move fits nicely into a .382 retracement
Time periods and their Fib symmetry are as follows:
XA = 143 weeks
AB = 106 weeks
BC = 11 weeks
CD = 89 weeks (I expect a new low next week around 75 cts or just below when the stop hunt kicks in on Monday (Greferendum) or Tuesday after RBA rate announcement)
AD time period = 206 weeks
XA = 143 weeks is .707 times of 206 weeks = AD
Price reversal is also @ .707 mark
So Price and time symmetry (in an inverse fashion)
AB divided by BC and the result squared
106 / 89 = 0.8396 if you square this number you will get = 0.705 (or say .707 - reversal point)
Positive divergence:
All the technical indicators in any time frame is portraying positive divergence.
If the pattern fails, then it's curtains for the Aussie...see you at the next stop @ sub 50 cts.
Note:
Details of the gartley-222 are described best by Larry Pesavento in his book Fibonacci Ratios with Pattern Recognition, look-up page 56.
Best to all
TrVic