SMHuss3
Short

EURAUD breakdown

FX_IDC:EURAUD   EURO / AUSTRALIAN DOLLAR
MONTHLY-

Price has failed to break through resistance of the upper boundary of the bearish channel/flag structure.

The second touch of this upper boundary which was seen in December 2014, and price action of this candlestick was very bearish with a large upper wick, similar to that of last month and this current month. Thus indication a possible long term down move.

WEEKLY-

At the resistance level mentioned above, last week price created a bearish engulfing candle.This bearish price action can be compared to the previous touch of this bearish line (resistance), where there was a shooting star formation.

DAILY-
Last week price bounced from the upper boundary of the bullish channel as well as the upper boundary mentioned above on the monthly analysis, hence providing further confluence of a strong resistance and hence a further bearish move.

The moving average are converging, showing a slowdown of bullish momentum . A possible cross to the downside may occur soon.

Now, a possible move is for price to move down to the 0.618 fib level, which is confluent with a fourth touch of the bullish channel.

A break of this channel may take price to ~1.4400 as a shorter term target. This zone is an area of previous support and resistance , 200MA as well as being close to a contact point of price with the lower boundary of the channel.

H4-

Price is currently in a key zone; a level of prior support and resistance . Also, price is sitting on the 200ma.

If bearish momentum is seen (with a break of the 200ma) a short term sell can be on, targeting the lower boundary of the channel. HOWEVER, price may break through the counter trend line. IF this does occur, and the moving averages do remain to the upside, then a long option may present itself. THEREFORE, at this moment in time, it is better to dictate its direction before entering a position in the short/mid term.

POSSIBLE TRADES:
If counter trend line breaks (along with other factors), long move may be considered.

If current support is broken ( 200MA etc), a shorter term sell may be considered.

A break of the channel will warrant a short if appropriate price action presents itself.

If price bounces off this level, there MAY be a long opportunity depending on price action.




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