EURAUD Analysis - Bullish Trend to Resume
Right now this is NOT a setup, just analysis that I see a setup forming sometime this week that will signal EURUAD is ready to continue its bullish trend that began on April 17. Looking at the chart, we can see from April 17 a beautiful bullish trend offering several pullback opportunities for retail traders to piggy back on the move.
And then on May 17 to May 30th, price formed a basing pattern as bulls became exhausted, but bears could not take control yet. On the 31 of May, bulls tried to exert one final push, but got immediately reversed at 1.52184. From June 2 to July 14 we can say that an intermediate-size corrective structure has formed on the charts. Now some may think that EURAUD's bullish run is over, and we are about to see a new range form or even a more significant reversal of the previous bullish move.
I think however it is more likely that buying of EURAUD will continue as there are several elements of confluence to suggest so:
1) The balance of the order flow behind EURAUD over the last few months has been overall bullish. What do we see after a large one-directional move? Oftentimes a correction or basing of the price before continuing in its previous direction
2) If we zoom out on EURAUD and look at the monthly timeframe we can see that for months and months and months EURAUD is actually rangebound. The previous April 17th bullish move resulted as price found support at the bottom of the range. As a swing trader, trading the daily chart still leaves generous room for profit on this trade as it can be held for several days before price will eventually base or correct once more.
3) The current corrective pattern of price action aligns almost perfectly with a 50% fibonacci retracement of the bullish movement from April 14th.
4) Price has determined 1.46260 to be a level of support, as seen on June 20th (the last time I bought this pair as I saw the exact same elements of confluence then), and this is almost exactly the same level that the July 14th candle closed and could not breach lower.
I will NOT take a trade on this pair until I see some confirmation that this level will continue to hold through the beginning of the new trading week. If I see this level holding I will update this idea with entry, stop loss, and take profit levels.
And then on May 17 to May 30th, price formed a basing pattern as bulls became exhausted, but bears could not take control yet. On the 31 of May, bulls tried to exert one final push, but got immediately reversed at 1.52184. From June 2 to July 14 we can say that an intermediate-size corrective structure has formed on the charts. Now some may think that EURAUD's bullish run is over, and we are about to see a new range form or even a more significant reversal of the previous bullish move.
I think however it is more likely that buying of EURAUD will continue as there are several elements of confluence to suggest so:
1) The balance of the order flow behind EURAUD over the last few months has been overall bullish. What do we see after a large one-directional move? Oftentimes a correction or basing of the price before continuing in its previous direction
2) If we zoom out on EURAUD and look at the monthly timeframe we can see that for months and months and months EURAUD is actually rangebound. The previous April 17th bullish move resulted as price found support at the bottom of the range. As a swing trader, trading the daily chart still leaves generous room for profit on this trade as it can be held for several days before price will eventually base or correct once more.
3) The current corrective pattern of price action aligns almost perfectly with a 50% fibonacci retracement of the bullish movement from April 14th.
4) Price has determined 1.46260 to be a level of support, as seen on June 20th (the last time I bought this pair as I saw the exact same elements of confluence then), and this is almost exactly the same level that the July 14th candle closed and could not breach lower.
I will NOT take a trade on this pair until I see some confirmation that this level will continue to hold through the beginning of the new trading week. If I see this level holding I will update this idea with entry, stop loss, and take profit levels.
Trade active:
Trade has been triggered.
Entry: I placed a limit order near the 1.46416 level that was filled at 1.46444.
Stop Loss: Tight stop loss below the key level at 1.46420
Target 1: 1.47230
Target 2: 1.48895
Target 3: 1.50740
Extended Target: 1.52220
Entry: I placed a limit order near the 1.46416 level that was filled at 1.46444.
Stop Loss: Tight stop loss below the key level at 1.46420
Target 1: 1.47230
Target 2: 1.48895
Target 3: 1.50740
Extended Target: 1.52220