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AUD/NZD to Finalize Double Top on H4 Chart

July 24, 2016 (Last updated on August 2, 2016) by

The Australian dollar had a rally going against the New Zealand dollar from July 8 through July 19. AUD/NZD has been consolidating in a kind of a double top pattern since then. The pattern is completed only when the right top’s slope reaches the neckline, but it is already time to set up a pending stop order in preparation for the breakout.

The chart below shows the double top pattern delimited with the yellow lines. The top one marks the tops, and the bottom one marks the neckline. The cyan line is my potential entry level in case of a bearish breakout. It is located at 10% of the pattern’s height below the neckline. The green line is my target — it is located at 100% of the pattern’s height below the neckline. I will set my stop-loss to the breakout bar’s high (or the high of the preceding bar if the breakout one is mostly below the neckline). I will ignore bullish breakouts as double top is a bearish reversal pattern. You can click on the image below to see it the full-size chart:

AUD/NZD - Double Top Pattern on Four-Hour Chart as of 2016-07-24

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this AUD/NZD pattern. You can trade it using my free Chart Pattern Helper EA.

Update 2016-07-27 17:07 GMT: Short entry triggered at 1.05944 about 3 hours ago. Stop-loss is set to 1.06413 with take-profit at 1.04675. Unfortunately, the pattern itself has deteriorated somewhat compared the form it had on Sunday:

AUD/NZD - Double Top Pattern on H4 Chart as of 2016-07-27 - Post-Entry Screenshot

Update 2016-08-02 6:05 GMT: The breakout turned out to be a strong one even despite some pullback attempts. The take-profit level of 1.05041 has been reached an hour and a half ago:

AUD/NZD - Double Top Pattern on H4 Chart as of 2016-08-02 - Post-Exit Screenshot

If you have any questions or comments regarding this double top on AUD/NZD chart, please feel free to submit them via the form below.

2 Responses to “AUD/NZD to Finalize Double Top on H4 Chart”

  1. victor gomez

    Hi..do you use fundamental analysis…there will be news on the NZD tomorrow…and on Tuesday Australian Consumer Prive Index will de published.

    How you expect those news in order to follow the trade youre setting up. ?

    Do you thinj they help to the breakout?

    thanks

    Reply

    Andriy Moraru Reply:

    I did not even look at the news calendar for AUD or NZD for the next week. For me, the technical side is sufficient to explain such set-ups. Yes, I think those event might trigger the breakout here. Or on the contrary, invalidate the pattern. Who knows?

    Reply

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