I hope you’re in the mood to trade the Aussie because I’ve got hot setups on AUD/USD and EUR/AUD on the menu today. Check it!
After shooting above the .7600 handle earlier this month, AUD/USD has gone back down and is currently lollygagging at the .7550 psychological handle.
And why not? The level not only lines up with an area of interest from way back in April, but it’s also right above a 38.2% Fibonacci retracement AND the 100 SMA on the 4-hour time frame. Oh, and check out stochastic chillin’ like a villain on the oversold territory!
Buying at the earliest signs of a bounce is a good idea if you think that the Aussie will revisit its June highs in the next couple of days.
But if you think that Aussie bears will want to revisit the .7475 areas or gun for the lower Fibonacci retracements before passing the baton to the bulls, then you might want to wait a bit before entering your trade orders.
Remember that retracement opportunity that we spotted a couple of days back? Well, it looks like it’s shaping up pretty nicely! EUR/AUD is seeing a slight bounce at the 1.4700 major psychological area, which is also right smack at a 38.2% Fib and the broken channel retracement on the daily time frame.If you look closely, you can also see that the 100 SMA is about to cross above the 200 SMA while stochastic is getting ready to bail on the oversold region.
Think the euro will jump back up to its 1.5200 highs? Buying at current levels and placing stops just below the Fib could get you a sweet reward-to-risk ratio especially if you aim for the previous highs.
But if you’re one of them Aussie bulls, then you could also wait for the pair to break below said support levels and wait for the earliest signs that the pair would go back to its downtrend.