EURAUD - Stay with the trend? Yes, but be cautious!
As I told you few days ago in my other posts, things are getting tricky on FX crosses, and certanly volatility is increasing. Look at EURAUD, which has had a wide channel bearish trend. What is next for this commodity currency?
Daily: Price broke the very important 1,4100 resistance before, but now it is sharply back above it. Actually Price is reaching the downtrend line and the Kumo. Theoretically staying with the trend it is an area where we should look for selling opportunity. The big question if the trend holds or not. The rate differential is good between between AUD and EUR, so the short position is carry positive. The problem starts if some sht happens in China, and in case these commodity ccys get more hit. Then you may think EUR is a crap, but if the positionning is too short in this pair, the bearish trend can end and can be changed to minimum a sideaway consolidation. (Bullish trend developing I doubt a bit now).
4 Hrs: Counter trend is active now on this time frame. Ichimoku setup is bullish, DMI setup is bullish, Slow Stoch is overbought here close to the trendline. We can see some pullback from this 1,4280-1,4300 level, but this lower time frame clearly shows why I am a bit worried about the major daily trend.
Selling now is nothing else but a top hunting. If you want to have better risk reward, then wait until the 4 Hrs time frame delivers a sell signal again.
Daily: Price broke the very important 1,4100 resistance before, but now it is sharply back above it. Actually Price is reaching the downtrend line and the Kumo. Theoretically staying with the trend it is an area where we should look for selling opportunity. The big question if the trend holds or not. The rate differential is good between between AUD and EUR, so the short position is carry positive. The problem starts if some sht happens in China, and in case these commodity ccys get more hit. Then you may think EUR is a crap, but if the positionning is too short in this pair, the bearish trend can end and can be changed to minimum a sideaway consolidation. (Bullish trend developing I doubt a bit now).
4 Hrs: Counter trend is active now on this time frame. Ichimoku setup is bullish, DMI setup is bullish, Slow Stoch is overbought here close to the trendline. We can see some pullback from this 1,4280-1,4300 level, but this lower time frame clearly shows why I am a bit worried about the major daily trend.
Selling now is nothing else but a top hunting. If you want to have better risk reward, then wait until the 4 Hrs time frame delivers a sell signal again.
