EURAUD 1W
Updated
- Spreads samples that the currency pair could fall further
- Commodity prices sample to a stronger AUD
- The couple broke through key long-term support
Recommendation:
Trade: Entry into a short position in the EURAUD currency pair at market price - Take Profit 1: 1,4800
- Take Profit 2: 1,4000
- Stop Loss: 1.6070
Justification
Commodity prices, especially copper and iron ore, indicate that the Australian dollar could be much stronger. It is worth noting that copper is close to the record levels of 2011, when the EURUSD was close to 1.30. We also see that the last move from the level of 38.2% retracement is similar to the strong falling wave in 2009 and 2010. From a technical point of view, it is important that the pair broke below the level of 50.0 retracement of increasing movement 2012-2020 and below the support, which was defined by local minima from 2006 - 2008 in the vicinity of 1.60. Another factor is the interest rate spread, which supports the idea of further weakening of the pair. It is also worth mentioning the latest RBA communication, which is not very negative against the stronger Australian currency. This business could be rather long-term in the order of several weeks to months.
Trade closed: stop reached
Stop Loss: 1.6070
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