We’ve got a euro special today, one for both the bulls and the bears on the common currency!
Are you down with these swing setups on EUR/AUD and EUR/USD?
For you euro bears out there, EUR/AUD is definitely a pair to check out as the bears have been in solid control for the past couple of months. Although, it has been a slow grind, but there are pretty clear levels and areas to watch out for that may be opportunities to play the downtrend further.
For the more conservative types, waiting for a bounce higher may be your thing, and if the pair does tick up, watch out for a retest of the falling 200 SMA for bearish reversal candles. It’s been pretty reliable as a turning point in favor of sellers so far, and unless we get a major catalyst to change sentiment, it may work once again on a retest.
For the more aggressive traders, the pair is breaking below the previous support area around 1.6150, so shorting now may make sense. But 1.6050 down to 1.6000 is looking like tough egg to crack, so may wait for a break of that major psychological area before taking a short on the pair.
The U.S. dollar has been taking it on the chin ever since massive stimulus measures were announced at the beginning of the coronavirus pandemic earlier this year. The euro has been a big beneficiary as EUR/USD traded below 1.1000 to its current levels above the 1.220 handle.
So for all of you euro bulls out there, dip buying makes sense on the pair, and we’ve see a pattern of that playing out beautifully since the beginning of November.
Recently, we just saw another move higher, but if the pair pulls back to the rising moving averages and rising ‘lows’ pattern, the odds are pretty good that buyers will step in once again to maintain control in if the environment remains void of negative risk sentiment catalysts.