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While I’m waiting for a bit more upside momentum on my NZD/USD idea, I’m also keeping tabs on this long-term range on EUR/AUD. Take a look!

Short EUR/AUD Idea

On the pair’s weekly time frame (yes, weekly!) I’m seeing a bit of a range with resistance around the 1.6100 to 1.6200 area and support at 1.3800.

Price appears to have been rejected at the top and might be aiming for the floor while stochastic heads south.

EUR/AUD Weekly Forex Chart
EUR/AUD Weekly Forex Chart

On the daily chart, I’m seeing a potential momentum entry on this break of the rising wedge bottom.

EUR/AUD Daily Forex Chart
EUR/AUD Daily Forex Chart

Fundamentals and risk sentiment line up neatly with this short play as the euro zone has been undergoing some political uncertainty stemming from Italy while the Aussie drew support from the China-U.S. trade truce.

However, it’s hard to tell how long these factors could stay in play, knowing how U.S. President Trump can be fickle and how Italy’s new coalition government could attempt to restore confidence.

With that, I’m gonna set a wide stop past the 1.6200 resistance for this play and while I’m aiming for the range bottom, I’ll also be ready to trail my stop along the way. This should still give me a nice 2.6-to-1 potential R:R, although I wouldn’t mind closing early if the story changes.

What do you guys think?

Happy

See also: Q4 2017 Trading Performance Review

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