Intraday Market Analysis: Euro Aussie Technical Confinement

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EURAUD Intraday Strategy

EURAUD has been contained into a tight range in the past several sessions based on the 4hr chart. While the Euro has been heavily sold towards the end of the European Central Bank (ECB) press conference, partially due to the spike in the Bunds market. The Australian Dollar (AUD) was also sold in the Forex market, hence the tight range Euro Aussie has been confined to.

EURAUD 4hr Chart

Please click on the chart to enlarge:

EURAUD 4hr Chart 24/04/16

EURAUD 4hr Chart 24/04/16

The reversed Head-And-Shoulders (H&S) is easily noted on the 4hr chart. The 21 Moving Average (MA) is acting as the nearest support level. EURAUD is trading between 1.4530 and 1.4595, which means no entry is available until the price reaches one of those levels.

1.4595 marks the neckline of the reversed H&S. A firm break above is required to affirm the uptrend in EURAUD, targeting 1.4705. Some traders may find it attractive to short EURAUD if 1.4595 is tested as it can viewed as a strong resistance level. Please note as it is part of a reversal pattern it may not be wise to seek short trades over a re-test should it occur.

1.4530 marks the support level that may contain the price should Euro Aussie retrace to that region. Although it is a firm support level, we would prefer to see a re-test of the lower support (in blue) as we suspect a significant amount of stops are concentrated below 1.4530, which may attract stop hunting operations. A successful re-test of the lower support (in blue) would be a more comfortable entry with an improved Risk Ratio (RR).

The Opening of the Market

If the market gaps above 1.4595 at the opening (Sunday night), 1,4595 must be re-tested to affirm the breakout. The preference would be a successful re-test based on a 4hr close. A gap below 1.4530 is meaningless unless the lower support (in blue) is successfully tested. If the gap extends towards 1.4450 we will issue an update to affirm whether the intraday strategy is still relevant.

26/04/16 UPDATE: There has been a real struggle around EURAUD resistance. The 21MA is continuing to provide they key support, we anticipate EURAUD to extend its gains in the market.

27/04/16 UPDATE: EURAUD acquired our target following the release of a weaker CPI in Australia.

Please click on the chart to enlarge:

EURAUD 4hr Chart 27/04/16

EURAUD 4hr Chart 27/04/16

As EURAUD acquired its technical objective this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.


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