Our market analysis points to a EURAUD sell on the Dailychart and this is based on an amalgam of reasons. If today closes as a sellerbar, this will potentially mark a crucial turning point in the ebb and flow ofthis cross-currency pair’s downward-trending cyclicity. We will be trading with the trend. Certainly, the reward to risk potentially gained on this trade isenough to make even the most cynical of traders salivate over the charts.
Not only is the daily rejecting a well established trendline which has been respected for over a year (a rarity on the daily), it is also interacting with the 0.618 Fibonacci retracement level (taken from the swing high of 18th May this year) to the most recent swing low of August this year. Furthermore, it is inching closer to the weekly R2 level ,which, tous, is a significant level of ‘hidden’ resistance.
While we do not tend to give a jot about fundamentals, one cannot feel a much higher level of comfort shorting the Euro against the Aussie Dollar for all of the reasons mentioned in the news. Do we care about news? No chance!
If the trade goes against us, we lose no more than 2% (themount we risk per trade). If it does go our way, we could potentially make 18% withthe added bonus of the interest rate differentials (selling Eur and buying Aud) being steeped in our favour either way.
Now that’s a fair trade!