Is the EURAUD About to Turn Into A Gusher?


Currency Pair: EUR/AUD
Closing Price: 1.5947
Entry Order: SELL stop @ 1.5933
Stop loss: 1.5987
Take profit: 1.5487

Analysis: In our Weekly Video Report last weekend I explained why I thought the past few months strength in the Euro was likely to give way to the major downtrend in play in this currency. Based on today’s price action in the EURAUD Key reversal/double-top), I think it is likely we will see further weakness in this pair. If the low price in today’s EURAUD session is penetrated, we could see a gusher to the downside in this pair.

With it hundreds of pips above the 200 day moving average I would only take longs (but hey I am a simple system trader). If it does fall sharply I will short it as it breaks below the 200 day moving average.

-Adrian

You’re effectively trading in a box. I would wait for price action to get move outside that box and buy if/when it retouches 1.6247 or sell if/when it breaks outside the box, then retouches at 1.5692 and prints a bearish candle from the 1.5692. Again for a sell get outside the box, retouch at 1.5692 and then prints a bearish candle for confirmation and sell of of that candle.

EUR/AUD TODAY’S ANALYSIS

The secondary trend of EUR/AUD is bullish on charts and price is trading above the trend line in its hourly chart. In hourly chart the price is sustaining above 200 day SMA and taking support of 50 day SMA indicating uptrend of the pair.
Resistance level of 1.5345 and Support level of 1.4950
If it breaks its resistance level on the upside and sustains above it then we can expect it to show further bullish movement in the pair.



INDICATORS:-
RSI is sustaining in its buying zone indicating the upcoming bullish trend in the pair.

STRATEGY: One can go for buy on lower level strategy for this pair for intra day to mid term positions in it.

On the daily timeframe the EUR/AUD looks pretty bearish with limited upside to me. It’s possible that there could be a reversal in the next few weeks (probably more like Jan/Feb) but I’d stick with shorts for now.


Looking like a bit of a sketchy double top to me, plus I think the long-term fundamentals might favor the Aussie (unless we see another sharp fall in iron ore) since the RBA is less dovish while the ECB still has an easing bias.