The EURAUD has been an interesting forex pair since its rally in February. Unlike the EURUSD there has been a lot of movement in the past few weeks. I’ve been sceptical to trade the pair, however, I am definitely looking to open a pending order this week.
Long or Short? Well, that probably depends on what news the EU is bringing out this week. If you look at the EURUSD, the USD is stronger, but the EUR is obviously stronger in the EURAUD pair. I expect it to move back up to around the “1.7309ish” level as seen on the trendline below, followed by a selloff to the 200day MA.
Of course, this is all speculation and if it beaks above that resistance, trendline I can see it turn bullish up until the 50% retracement of the Fibonacci level. As you can see on my labelling on the chart, I state that the fib levels don’t seem to be too much in play. (Note the 50% retracement is not a true fib level.)
If anybody has any input, please comment. I’d appreciate any view of this currency pair.
Two strong bull bars may suggest a trend reversal but what is interesting is that with just two bull bars has seen price almost reach the 50% fib at 1.73019.
That will be a test of the last trend continuation pattern in that very tight bear chanel. This is something I would be watching as it could just be a deep pull back in a bear trend.
I personally would look to short the EUR/USD of that 50% level expecting that bulls who bought at the start of that pull back will look to take some profits and bears who have been trapped out of that bear trend will see an opportunity to sell at a higher price to get into that bear trend.
Fundamentally a lot will depend on the state of the USD as it battles COVID19.
Just my thoughts.
Cheers
Blackduck
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You are right. On the futures market the fib is at 38.6%. Note the rejection at the whole number.
Here is my chart of the same pair.
Cheers
Blackduck
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Thanks Blackduck, I will definitely keep an eye on the EURUSD. I had a few good trades with this pair when it was moving a lot and expect the volatility to pick up a bit in the coming weeks.
So am I so lets see what happens.
Cheers
Blackduck
