EUR/AUD is a pair I have maintained a strong bearish bias on for a while. This originates from the monthly time frame where price has been sitting within a strong area of interest between 1.6000 - 1.6200. If you were to zoom out on the monthly time frame and highlight this region you will see the countless times it has been used as both support and resistance dating back too 1993.
Indeed 1.6200 was broken above around 6 weeks ago, However we respected 1.63600 and even failed to make weekly highs. This, too me seemed to be a very manipulative move. on the 1st of October 2018, price formed a very bullish play after breaking 1.6200 for the first time in a while. This formation would of tricked many retail traders into believing this pair was above to rocket to the moon...in fact we plummeted.
To me bullish structure has been broken and the momentum is no longer there. the past 3 weeks price has been declining steadily, but this move was running out of steam. As mentioned on my Instagram (@nicklindleyfx) I was looking for price to form a pullback to the upside for more short orders to be filled. Indeed we saw this, a pullback, retest and rejection of 1.6000...These levels have been key for this pair!
This retest and rejection is seen clearly on the above daily chart. Where price has been forming some strong bearish candles suggesting the momentum is back. Across the next few weeks I can see price extended its decline first to0 1.58000 (around 80 pips) and then even further too 1.57000. If this is fulfilled it will be the case of re-analysing the pair as retail traders begin flooding the shorts.
To be honest, I will not be entering a short on this pair this week. Although this set-up looks very viable, it does not fit my entry criteria on the lower time frames and it is clear I have missed my preferred entry and it is vital I keep to my guns and retain myself from chasing a trade!
I have put this piece of analysis out there because of my love for this craft.
Indeed 1.6200 was broken above around 6 weeks ago, However we respected 1.63600 and even failed to make weekly highs. This, too me seemed to be a very manipulative move. on the 1st of October 2018, price formed a very bullish play after breaking 1.6200 for the first time in a while. This formation would of tricked many retail traders into believing this pair was above to rocket to the moon...in fact we plummeted.
To me bullish structure has been broken and the momentum is no longer there. the past 3 weeks price has been declining steadily, but this move was running out of steam. As mentioned on my Instagram (@nicklindleyfx) I was looking for price to form a pullback to the upside for more short orders to be filled. Indeed we saw this, a pullback, retest and rejection of 1.6000...These levels have been key for this pair!
This retest and rejection is seen clearly on the above daily chart. Where price has been forming some strong bearish candles suggesting the momentum is back. Across the next few weeks I can see price extended its decline first to0 1.58000 (around 80 pips) and then even further too 1.57000. If this is fulfilled it will be the case of re-analysing the pair as retail traders begin flooding the shorts.
To be honest, I will not be entering a short on this pair this week. Although this set-up looks very viable, it does not fit my entry criteria on the lower time frames and it is clear I have missed my preferred entry and it is vital I keep to my guns and retain myself from chasing a trade!
I have put this piece of analysis out there because of my love for this craft.