EURAUD - EUR Weakness On Its Way?Analysis:
Looking at the chart and price action we can clearly see that price is in a downwards trend. We're forming lower lows and lower highs which confirms that we're in a downwards trend. Bearing this being in mind we're only looking for short setups. If we look at the previous lower low we have a strong area to enter from. Whys this? Well this area has held multiple times in the past as both support and resistance so we expect that it will do it again. Also in a downwards trend we'd expect price to pullback to the previous lower low to put in a new lower high before continuing to the downside and this is what we're seeing now. For more added confluence at this area we also have the 61.8% fib retracement level which is often classed as the strongest fib level. We expect that sellers will be sat at this level wanting to push price down further, so this helps out our bearish thesis. We also have a downwards trendline very close by. This trendline has been respected in the past so we expect that it will be respected again and we will see sellers enter into the market pushing price down further. Fundamentally the EUR is the strongest major currency compared to the AUD which is the 6th strongest major currency so this really doesn't go in our favour but in recent news events we've actually see some bullish news come out for the AUD with regards to unemployment claims and other key events whereas for the EUR it's been slightly mixed. This to us looks like early signs that we could be seeing some bullishness for the AUD and some bearishness for the EUR soon, which is why we want to get on this move before it happens so we can catch a great trade. With all of the confluences that we have both technically and fundamentally we have a bias to the downside which is why we're bearish EURAUD.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read. We appreciate it all.
Stay Safe - JPI
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does to. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
