EURAUD Suffered a huge decline in the period from late Nov through to early Jan. Moving from just below 1.4000 to close to 1.2000. - The past 2 months however it has been in a large sideways pattern. - Bigger picture there is a chance this is part of a basing pattern which could see a decent correction higher for this pair. I would like to see if this could sustain a move over 1.2500, thus far it has failed miserably, a recent move up to 1.2600 barely lasted 24 hours before being hammered back down. - First stop if it can make a break (and hold) over 1.2500 would be near 1.3000. - If it can then hold those gains, there would be a shot at pushing on towards near 1.4000, though at this stage looking at that may be a step to far. - Breaking back below 1.2200 would probably consign this basing to the back-burner - for now at least.
Disclosure: I am currently long EURAUD.
Please Note: In additional to occasional technical analysis, my main profession is as a 'Trader Performance, Psychology and Development Coach' working with traders in banks, hedge funds and proprietary trading houses. - If you would like to find out more about my work and how it could help you or your business, please email me on sgoldstein@bgtedge.com or check out my website www.mindsetofatrader.com.
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Hi Steven - I like your analysis and thought process with charts. I picked few pointers from your prior chart analysis posts.
ReplyDeleteI am approaching EURAUD from different angle though i.e., strong down move on weekly to have another down leg, on daily - side ways base to dissipate momentum but unable to stay above resistance forming trap, again strong down and weak up again by stalling. So I am approaching from bearish side expecting another down leg. (Note: I don't have a position on EURAUD. So this is more like learning exercise for me.)
HI Durga. - This particular pattern is notoriously difficult to trade in the basing stage. - I like to simplify it as much as possible, in my opinion if it able to start making headway over 1.2500, then I would favour more upside, though I would like to see how that unfolds. - IF on other hand 1.2260 recent low is clearly breached, then I would say your scenario certainly comes into play.
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