This currency pair has historically shown beautiful wave symmetry and I think we are in a 5 wave up and at the start of wave 3.
I missed the upward trailing bar, but as luck would have it, had I entered I would have autoclosed. So now I'm waiting for a 1 bar trailing to cover a higher high and have stochastics cross not too close to the overbought 80 zone in order to take a long position. I also have to weigh up risk.
I may have to go down to 1hr to time this well. I do not trade intraday, so timing is trickier than a day trader.
There is a risk of a protracted sideways movement, particularly with all this trade war talk putting downward pressure on the Aussie.
I missed the upward trailing bar, but as luck would have it, had I entered I would have autoclosed. So now I'm waiting for a 1 bar trailing to cover a higher high and have stochastics cross not too close to the overbought 80 zone in order to take a long position. I also have to weigh up risk.
I may have to go down to 1hr to time this well. I do not trade intraday, so timing is trickier than a day trader.
There is a risk of a protracted sideways movement, particularly with all this trade war talk putting downward pressure on the Aussie.
Trade active:
Like AUD/USD, I think the AUD/EUR is now stuck in a channel.
I just did a Short sell 0.6324 stop loss 0.634 (where stoch on 1 hr crossed) and limit to 0.6309 as I only want to scalp a small profit and do not want long exposure to this view. I just want to trade the channel. 1 hr & 3 hr stochastic momentum is falling... just ride the wave down to 61.8 retracement on the 1 hr chart.
I'm still bullish medium term, but while I'm waiting for the wave down to complete, why not go short & take adv of the ride?
Important Aussie & Euro announcements this week will dictate where AUD/EUR pair head next from this channel.
I just did a Short sell 0.6324 stop loss 0.634 (where stoch on 1 hr crossed) and limit to 0.6309 as I only want to scalp a small profit and do not want long exposure to this view. I just want to trade the channel. 1 hr & 3 hr stochastic momentum is falling... just ride the wave down to 61.8 retracement on the 1 hr chart.
I'm still bullish medium term, but while I'm waiting for the wave down to complete, why not go short & take adv of the ride?
Important Aussie & Euro announcements this week will dictate where AUD/EUR pair head next from this channel.
Trade closed manually:
Closed the trade a little early to take profits. However it did continue through 0.6309 and has sunk further down since.
Still waiting for momentum to turn bullish....
Still waiting for momentum to turn bullish....
Comment:
I took a step back and drew some trendlines. The chart pattern looks like a broadening channel developing.
The economic calendar this week will provide some shocks - the Aussie CPI numbers, German consumer confidence and ECB rates. These can throw a pebble into the pond and disturb the AUD/EUR wave pattern... but I think these waves are still part of an underlying current upwards.
1AUD based on PPP should naturally be around 70 Euro cents, so it's undervalued at the present exchange rates. I think if not this week, then by week 2 we should be out of this channel and moving back up past the historically oversold valuation.
The economic calendar this week will provide some shocks - the Aussie CPI numbers, German consumer confidence and ECB rates. These can throw a pebble into the pond and disturb the AUD/EUR wave pattern... but I think these waves are still part of an underlying current upwards.
1AUD based on PPP should naturally be around 70 Euro cents, so it's undervalued at the present exchange rates. I think if not this week, then by week 2 we should be out of this channel and moving back up past the historically oversold valuation.
At the time I looked at the hourly chart yesterday, the last red back down in the hourly wave 5 had not reached the fib level PLUS the stochastics had not yet moved into oversold. I was out for the rest of the night & didn't see the turnaround... in fact I was expecting further downward movement as the hourly Wave 5 didn't look fully formed and I thought stochastics were going to fall further.
Daily stochastics aren't giving me a strong enough signal to go long on the daily chart - although the trailing bar is now bullish covering and the hourly chart is retracing on the huge bullish reaction to the Aussie unemployment data.