It’s all about the euro today, as we take a look at short and long-term forex retracements on EUR/AUD and EUR/CHF. Check it out, yo!
Remember that downtrend that we checked out a few days back? Well, it looks like some euro bears had a party off of it! Since then the pair has fallen by about 150 pips and is showing a possible retracement from the strong move.
The 1.1850 pyschological handle is level to watch, as it lines up with the channel support that the pair had followed. Not only that, but it’s also near a 38.2% Fibonacci retracement level.
A short trade at the earliest signs of bearish momentum around the 38.2% Fib is a good idea if you think that the euro will extend its downtrend against the franc.
If you think that we’re seeing a fakeout, though, and that the common currency is due for a bounce, then you could also wait for the pair to break above the Fib levels and trade a possible trip to the 1.1950 previous resistance.
Support alert! EUR/AUD just hit the 1.5700 major psychological handle, which is right smack at the 100 SMA on the daily time frame. What’s more, it also lines up with a support and resistance level from back in November 2017 and February 2018.
Will the euro extend its uptrend against the Aussie? An oversold signal certainly increases its odds.
A long trade at current levels could get you a good reward-to-risk ratio especially if you place your stops just below the 100 SMA and aim for the previous highs just below 1.6200.
Just make sure you place wide stops, aight? Remember that currency crosses like these tend to be more volatile than the majors!