EUR/AUD - Now What? - 5/5/2016

FX:EURAUD   Euro Fx/Australian Dollar
15 0 1
If you are looking for an example that how quickly things change in Forex then this pair comes to mind right now. Even we did a post on how to short Euro             using EUR/AUD             rather than getting involved in choppy EUR/USD             ! LOL But well, as everything is ephemeral, that was a different era ( Sometimes a week is an era in Forex !) We were convincingly short EUR/AUD             from 1.5200 and got more than 600 pips along the way towards 1.4500 but then things changed.
As the fundamental arguments for the trade change, we have to change. Even after a rate cut from RBA, it seems like AUD is not depreciating that fast. So now since we are looking to switch side from EUR/AUD             short to EUR/AUD             long, we have to be careful picking the levels.
Initially we are looking for 1.5200 /1.5100 as a good test for the pair for defining the next big leg. Above 1.4900 we are looking for levels to get long for both short and medium term. Only caveat to this trade is that commodity starts to recover, good print from Australian data - CPI             in particular and abandonment of further easing bias from RBA by market.
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