It’s all about the Aussie on today’s canvas, as we tinker around with forex trade opportunities on AUD/USD and EUR/AUD. Check it!
Aussie bulls and bears are in a tight tug-o-pip battle around the .7350 – .7450 area after AUD/USD held a downtrend from way back in January.
If you’ve read the School of Pipsology then you’ll know that pattern breakouts like these are usually as strong as the height of the consolidation. In this case, we’re looking at a 100-pip action!
A 100-pip upside breakout should be enough to take AUD/USD above the falling trend line that hasn’t been broken since the start of the year. Meanwhile, a downside breakout could make way for a drop back down to the .7170 previous support.
Will we see a breakout soon? And if we do, which direction will it go? Make sure y’all prepare your trading plans for either scenario and take measures to NOT getting caught in a fakeout!
Here’s a simple trend play for ya! EUR/AUD is having trouble making new lows below 1.5600, which isn’t surprising since the psychological handle is supported by the 200 SMA, a rising channel, AND a strong area of interest on the daily time frame.
Buying at current levels is a good idea since stochastic is flashing an oversold signal and a long trade would give you a good reward-to-risk ratio.
Just make sure you don’t use tight stops, aight? You’ll be in for a world of hurt if you use tight stops when trading currency crosses and long-term time frames like this one!