EURAUD | Perspective for the new weekWill the market risk appetite continue to take its toll on the ‘Aussie’ as a reversal setup evolves? The Euro continued to exhibit strength since November 2021 and a Breakout of Key level structure during last week trading session could be an avenue to look for buying opportunities in the coming week(s). Now, what are my expectations?
Tendency: Uptrend (Bullish)
Structure: Breakout | Supply & Demand | Trendline | Reversal pattern (Double Bottom)
Observation: i. It is no doubt that the overall perspective on this pair is bearish with the bearish trendline going as far as April 2020.
ii. However, since price tested A$1.535 in November 2021, the price has continued to finder higher lows which culminated in what looks like a successful breakout on the 26th of November 2021.
iii. Following this breakout, the price touched A$1.615 to respect the bearish trendline on the 2nd of December 2021.
iv. The bearish momentum following the touch of A$1.615 appears to have reduced as we continue to witness rejection of the A$1.56 area to confirm a Demand zone is mature.
v. And if we look closely, we will notice that the rejection within the demand zone shares a confluence that respects the new Bullish trendline to signal a possible reversal set-up.
vi. A visual representation of a trend after connecting a series of prices with a line drawn under pivot lows shows the prevailing direction and speed of price in the last 3 months.
vii. Now, the appearance of a Double Bottom within the identified Demand zone which also shares a confluence with the new trend describes a possible change in trend and a momentum reversal from prior leading price action with confirmation at Breakout of Key level (A$1.5800) which is also the neckline of the pattern.
vii. The early hours/days of the new week might see a drop in price into the key level to incite a Trend continuation.
viii. Hence, it is appropriate to state here that, above key level @ A$1.5800 remains the most comfortable place to open a long position with an opportunity to add to our existing position at a breakout/retest of A$1.59500 level... Trade consciously!😊
Trading plan: BUY confirmation with a minimum potential profit of 400 pips.
Risk/Reward : 1:3
Potential Duration: 5 to 12days
NB: This speculation might be considered to make individual decisions on the lower timeframe.
Watch this space for updates as price action is been monitored.
Risk Disclaimer:
Margin trading in the foreign exchange market (including commodity trading, CFDs, stocks etc.) has a high risk and is not suitable for all investors. The content of this speculation (including all data) is organized and published by me for the sole purpose of education and assistance in making independent investment decisions. All information herein is for your reference only and I take no responsibility.
You are hereby advised to carefully consider your investment experience, financial situation, investment objective, risk tolerance level, and consult your independent financial adviser as to the suitability of your situation prior to making any investment.
I do not guarantee its accuracy and is not liable for any loss or damage which may result directly or indirectly from such content or the receipt of any instruction or notification therewith.
Past performance is not necessarily indicative of future results.
