AUDUSD Trades Under August Low; Risk Moved to 10530

 
on August 17 2012 9:11 AM

EXTREME complacency is evident not just from recent volatility readings but also from recent ranges (one and the same). The red dots on the first chart indicate a 5 day range equal to or less than 1.1% (which was reached on 8/10). Since 2008, ranges this small have led to declines of at least 800 pips with lag of anywhere from 2 weeks to 2 months. In other words, respect the potential for several false starts. Adherence to proper strategy and risk management should enable us to catch the meat of the next drop. I am currently short from 10520. The drop below 10435 allows the stop to be moved to 10530 (originally 10590 then 10580). A review of the big picture wave pattern (triangle) and substructure of triangle wave c (or d) is included as well.

AUDUSD - Daily Bars

AUDUSD_Trades_Under_August_Low-_Risk_Moved_to_10530_body_audusd.png,

Prepared by Jamie Saettele, CMT

AUDUSD - Weekly Bars

AUDUSD_Trades_Under_August_Low-_Risk_Moved_to_10530_body_audusd_1.png,

Prepared by Jamie Saettele, CMT

AUDUSD - 240 Minute Bars

AUDUSD_Trades_Under_August_Low-_Risk_Moved_to_10530_body_audusd_2.png,

Prepared by Jamie Saettele, CMT

To contact Jamie e-mail jsaettele@dailyfx.com. Follow me on Twitter @JamieSaettele

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Jamie is the author of Sentiment in the Forex Market.

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