Due to the current strength of the Australian Dollar, we can expect continued bearish momentum toward equal lows at 1.59481. This is where the stop losses of long position traders are and the institutional traders may target this liquidity pool at 1.59481.
Further take profit areas are: 1.56787 and another equal low at 1.53323
Retail buyers may believe that price is at current support but due to the current trend, there is a good chance of continued bearish movement.
Look for selling opportunities in the Asian session and New York session near the current support area.
Hi, great analysis. But the EUR/AUD is in an area where it can move up, I think most people are expecting to go up, but same as you I think it might go down, but the question is how do we know when to enter considering the price at the moment is in balance not knowing whether it will go up or down. Even if we go down to 4h, 1h timeframes this could also be misleading as the area from current 1.61300 to 1.59481 is quite big the price can move up or down at any time.
snunes1234
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Thank you. Yes, most retail traders expect it to go up just because it's at a support area but If trading was so simple everyone would be winning, and this is what the banks want (more traders on the wrong side of the trade). The institutional traders know that retail buyers are expecting obvious bullish movement at an obvious support area just because it's at a key support price. That bullish move is still definitely possible and I will look out for it, however, the strength of the Australian dollar is much greater than the Euro dollar and will be a huge factor in institutional order flow toward the prices I called. The 1.59481 price is not that far to be honest, but we must remember that this is where large amounts of liquidity will be in the form of long traders' stop losses and breakout traders' sell stops. The institutions must target these liquidity pools to make money. However, the possibility of a bullish move still remains.
In Asia and NY sessions there can be possible short entries. In the Asia session, you can expect the high of the day as the institutions may reprice the currency higher toward previous highs or toward a bearish order block. Continuing in London and NY sessions, we should see a bearish move toward the liquidity pools below. Hope this helps you out and we'll see how it pans out!
Helena_FX
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@snunes1234, Thank you for your reply. I have to say it sounds quite realistic everything you have said. Currently, on 1h timeframe it has gone back down to the previous daily low, hopefully, during the Asian session it will move up a bit...