Short EUR/AUD on downside break, French political uncertainty
Having broken through a long-standing support zone on Wednesday, and with uncertainty over the outcome of French elections like to persist for several weeks, selling rallies in EUR/USD screens as favourable in the near-term.
EUR/AUD looked like it may have bottomed last Friday with a morning star pattern formed to start the trading week. However, the bearish engulfing candle that followed has set the tone since, seeing the pair slice through a support zone that successfully repelled bears either side of the calendar turn.
Now that EUR/AUD has broken below, it allows for shorts to be set targeting a return to 1.6000 where it did some work either side of in June 2023.
Selling at these levels is acceptable but it would be preferable to initiate shorts on pushes towards the bottom of the prior support zone at 1.6130, allowing for a stop to be placed above the top of the zone at 1.6150 for protection.
DS
EUR/AUD looked like it may have bottomed last Friday with a morning star pattern formed to start the trading week. However, the bearish engulfing candle that followed has set the tone since, seeing the pair slice through a support zone that successfully repelled bears either side of the calendar turn.
Now that EUR/AUD has broken below, it allows for shorts to be set targeting a return to 1.6000 where it did some work either side of in June 2023.
Selling at these levels is acceptable but it would be preferable to initiate shorts on pushes towards the bottom of the prior support zone at 1.6130, allowing for a stop to be placed above the top of the zone at 1.6150 for protection.
DS
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