Chart of the Day: EUR/AUD

I had anticipated writing about a USD pair today, but the mood seems to have changed on these pairs with the release of the Nonfarm Payrolls this morning.

      I learned a long time ago that the best traders react to the market instead of trying to predict it, so for time being anyway, it is time to look at some of the crosses (pairs that do not contain the USD) for potential trading opportunities. One such pair is the EUR/AUD. This pair is in a downtrend and seems poised to continue that bearishness as it moves down towards support. Traders can either sell on a move down through that support level or use their favorite indicator to time their sell entry. One such indicator is the MACD which I have plotted on this 4-hour chart. The sell signal with this indicator is when the MACD line (green line) crosses below the Signal line (black line). Make sure the candle closes before confirming this to make sure you have a good crossover. Also remember to use a protective stop and use a 1:2 risk: reward ratio on your trade. If you risk 100 pips, look for 200 pips in profit.