Forex Update: Chance to Short EUR/AUD

Got the opportunity that I’ve been waiting for to short EUR/AUD! In case you’re wondering what I’m talking about, make sure you check out my original EUR/AUD short forex trade idea first.

I decided to be a little more patient with this one, as I refrained from setting any short orders prior to the Holy Week holidays. Never know what could happen over the long weekend and I didn’t want to risk getting blown out by weekend gaps.

I did notice that price bumped the ceiling at the 1.4800 major psychological level then consolidated for a while. A downside break could confirm that the downtrend is still underway so I waited to short below the tight short-term range. As you can see from the chart below, I was able to get in at 1.4750 in today’s Asian trading session and I’m aiming for the bottom of the channel around 1.4600.

EUR/AUD 4-hour Forex Chart

EUR/AUD 4-hour Forex Chart

With a 100-pip stop outside the falling channel, I’m looking at a potential 1.5-to-1 return on risk for this setup. I’ll be extra mindful of the upcoming data releases, namely the Australian CPI and euro zone PMI reports, to see if I should exit early or start thinking about adding to my position. If you’re thinking of taking the same forex setup, make sure you read our risk disclosure!

What do you guys think of my trade idea? As always, I’d love to get your feedback so don’t be shy to share your thoughts in the comment box below.

Cheers!

Happy time

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  • whenim64

    I was wondering if you looked at any longer term chart time frames when you were thinking to commit to a short position in EUR/AUD?

    The move up that occurred today has been in development for weeks. You can see that if you consult the weekly and daily time frames. For myself, I look at more than one time frame to interpret the direction of the currency pair and only narrow down to an intraday chart once the direction has been established using weekly and daily candlestick charts.
    I think it’s much less risky to pick a tree by looking at the forest instead of picking a tree by looking at a tree.

    • Happy Pip

      Yep I did! It’s just that the fundamentals seemed to favor a short bias for the pair, before the Australian CPI figure was released and I thought the short-term downtrend would continue. Thanks for sharing your thoughts though, I really appreciate it!