Looking for setups to trade to start your trading week?
I gotchu with EUR/AUD’s possible turn from a technical resistance area!
Let’s take a look at the 1-hour time frame:
EUR/AUD 1-hour Forex Chart by TV
As you can see, the pair is knocking at a range resistance that hasn’t been broken since late June.
Add an overbought Stochastic signal and you can see how at least some euro bears or Aussie bulls will notice.
The Reserve Bank of Australia’s (RBA) policy decision in the next Asian session could make or break EUR/AUD’s recent upswing.
Word around is that the central bank would keep its interest rates steady in August.
Of course, more than a few traders wouldn’t put it past Governor Lowe and his team to raise their interest rates by 25 basis points to 4.35% to underscore their commitment to lower inflation.
Between the RBA possibly surprising markets with a rate hike, China rolling out different stimulus measures and plans, and the Eurozone printing weak PMI reports lately, EUR/AUD could see losses this week.
Depending on how the markets react to RBA’s decision, I’m looking to short EUR/AUD at the 1.6500 – 1.6550 area.
The 1.6400 and 1.6375 zones could serve as initial targets though I’ll be open to keeping the trade open all the way to the 1.6250 range support depending on how the European earnings reports play out.
If the RBA’s event turns out to be surprisingly dovish, or if this week’s market themes weigh on AUD or favor the safe haven(ish) EUR, then I’ll also be open to an upside breakout trade that targets the 1.6650 previous area of interest.
What do you think? Will EUR/AUD stay inside its range this week?
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
Comments are closed.