As the market adjusts to the RBA raising interest rates, and the scramble to get on the positive side of the Aud/Usd pair takes place, we can use the initial 15 minute candle after the release to gauge the potential in any long entry.
By running a Fibonacci study on the initial move, and then monitoring the subsequent price action, we can make a possible play off the subsequent candle formation.
The 38% retracement area looks as though it is initially holding as support, and the high of the initial candle has held as resistance.
The second 15 minute candle to form can provide provisional Entry and Stop Loss areas to work higher from, and introduces a 1:1 risk/reward Entry option for near-term traders that may be able to build into a longer-term play.
The first leg Entry could be at 0.8830, with a tight Stop Loss at 0.8810, and initial target at 0.8850 to either bank at, or add to.
From there it is all about adding lots as the initial candle price points get broken with further Entry points at 0.8850, with Stops at 0.8830, in an easy play that controls expectancy and rides market momentum.
Things may reverse to support at the lower Fibonacci areas of the initial candle, but for those who are prepared to trade news releases, this may be a better way to go than trading the second that the release is out.
Playing the momentum of a news releases, and ignoring the moment that the headline hits creates controlled expectancy, and limits exposure.
Building a trading plan around these moves, and learning how to control expectancy and cap exposure are covered in TheLFB on-line Training Academy Courses
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