EURAUD Technical Entry: Joining the Chaos

EURUSD Fundamentals

We noted some volatility in the FX markets that were initially triggered by the European Central Bank (ECB). The ECB is leaning towards removing the easing bias in its upcoming monetary policy, which sent the Euro higher against a basket of currencies.

Reports that Trump Junior’s emails reveal he was content with the Russian support against Hillary Clinton weakened the US Dollar (USD) along with doubts the Fed will indeed hike rates again by the end of the year. As a result EURUSD was able to grind its way to current levels.

The key economic figure this week that may trigger unusual volatility as we updated via emails is the US Consumer Price Index (CPI) on Friday as it may heavily weigh on the possibility of another hike this year. The Fed viewed the weak inflation as temporary, should the figure come in the negative we may heavy USD selling against a basket of currencies.

Moody’s credit rating agency warned the UK may face a credit downgrade in light of the brexit negotiations but at the time of this writing GBP largely dismissed the report, the key focus is on the UK CPI that is expected to be published on Tuesday.

EURAUD Daily Chart

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EURAUD Technical Entry: Joining the Chaos

EURAUD Daily Cahrt 12/07/17

EURAUD 4hr Chart

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EURAUD Technical Entry: Joining the Chaos

EURAUD 4hr Chart 12/07/17

EURAUD Strategy

We will begin with EURAUD daily chart. We have noted the higher highs and lower lows of the cross, which is a distinct sign of established uptrend. The 55 Moving Average (55MA, in blue) acts as the nearest support.

On EURAUD 4hr chart we noted the 100MA (in black) acts as the nearest support, which suggests we may see some gains in the cross prior to the daily close. From a technical angle a daily close is often provides a firmer entry but if timed correctly we may be in a minor profit (20 – 30 pips) by the daily close.

Should the price break below the MA’s the entry remains valid as long as the price remains above 1.4815. The FOMC members that are due to speak on Thursday may trigger some volatility that may impact EURUAD. The US CPI on Friday is the key figure.

We should stress that if we mistimed the entry we may be in a minor drawdown prior to the daily close where we expect the gains to materialize within the next 48 hours. In an event significant gains take place in EURAUD prior to the daily close we are likely to heavily downsize the position as it may increase the odds for corrective weakness on Thursday.

We may initiate the signal as we near the 4hr close.

EURAUD Trade Alert

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EURAUD Technical Entry: Joining the Chaos

EURAUD 4hr Chart II 12/07/17

EURAUD long at market price (1.4879)
Take profit: 1.5150
Protective stop: 1.4758
Risk Ratio (RR): 1 : 2.4 (approx.)
Estimated duration: 7 days (approx.)

Price range: Should the price trade above 1.4915 and you did not opt for the trader consider reducing the trade size or dismissing the entry.

13/07/17 UPDATE: EURAUD triggered the protective stop, we are not re-entering the market. Economic data from China triggered moderate gains in AUD, combined with a weak Euro EURAUD sliced through 1.4815, which lead to further weakness in the cross.


AS ALL THE SIGNALS IN THIS PAGE ARE CLOSED THE STRATEGIES ARE NOW ACCESSIBLE TO ALL TRADERS



EURAUD Technical Entry: Joining the Chaos

EURAUD Technical Entry: Joining the Chaos