Short

EUR/AUD - 200 Pips+ Opportunity

Updated

EUR/AUD has broken down the 200 EMA and is currently in a bearish trend.

An opportunity has presented itself to enter the bearish trend. As the price breaks the current support (1.56 area) it may continue down for the rest of the month until it finds a strong support.

The long term bearish move is cancelled if the pair finds the strength to break the 1.57 area.

Happy trading! Follow your rules!

Note

Be aware, there will be the RBA Monetary Policy Statement at 9:30 PM EST. Therefore, prices will flucuate a bit and might get volatile.

Order cancelled

Trade closed for the moment as we're approaching the RBA's announcement regarding interest rates.

Note

We can put an order to enter this position at 1.5590 area before the RBA's announcement in case prices move lower, we can enter back in the trade.

Note

Philip Lowe, the governor of the Reserve Bank of Australia has a positive economic outlook as this article describes: bloomberg.com/news/articles/2018-08-08/rba-s-lowe-sees-inflation-reaching-target-in-2020-rates-on-hold . Thus, we can expect the release of their quarterly economic forecast to have a somewhat more positive outlook.

Note

Here is the release of their quarterly monetary policy assesment: rba.gov.au/publications/smp/2018/aug/pdf/00-overview.pdf

Trade active

Trade is back active. Unless it breaks and holds the 1.5660 area, the continuation pattern is still a go.

Note

The market is only but correcting itself. It's simply a pullback. Over the long term, the bearish trend isn't canceled as the 1.57 area hasn't been broken. That level was the last support and if it acts as resistence, the move below can continue. However for now, we need to wait and see how it's going to react. Even if you've made a loss, you could eventually enter back with a risk:reward ration higher than 1:4 making back your loss + profits. In case it dooes the break the 1.57 area, which I don't think it will, we still have an opportunity to ride this bearish trend. Risk management is key in trading.

Note

As soon as the 1.56 area is broken, the move down begins.

*Important, it must not find support higher than 1.5650. Last time it broke that level, went up to last support area, couldn't break it and went back down and broke the 1.5650 area without finding support on top of it. Which is good for the bearish trend.

Trade active

SL: 1.57
TP: 1.5310

Note

OR simply put a pending order at 1.5580 and SL 1.5645 TP 1.5310

Note

Prices are acting up between the 200 ema and 50 ema on the daily timeframe (Same as with GBP/AUD before it's break down). However, it still hasn't broken above the 200 ema on the 12 hour timeframe which has until now acted as resistance after it broke it down. We can expect it to eventually to continue its way down and break the 200 ema on the daily. Let's see how this turns out!

Note

Prices could jump if it's not able to break the ema on the 30 min timeframe.

Order cancelled

Trade active

As the 1.57 area and 200 ema has acted as resistence and wasn't broken, we can expect the long term bearish move to finally begin.

Note

Here is the link to the speech Philip Lowe from the RBA gave today. rba.gov.au/speeches/2018/sp-gov-2018-08-17.html

Note

We can expect EUR/AUD to finally break the 1.56 level this week and move lower.

Order cancelled

As soon as 1.56 level was hit... Prices rebounded. I've made a loss in this position as well. We learn from our mistake and move to the next trade (Market was too choppy, failed to break the support multiple times while other pairs such as EUR/CAD, EUR/SGD had already moved down).

Nonetheless, if you entered and managed this trade properly according to your rules, you wouldn't have lost a lot on it. Furthermore, if your win to loss ratio is high enough (More than 65-70%) then you'll make back what you lost in less than a trade and more.

MoolahMaker

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