We hope that you are having a productive weekend and are getting your watch-lists ready for the week ahead.
In this post we will be taking a look at EUR/AUD and where we could see price go next.
First of all it is key to mentioned that the monthly candle closed bearish spiking off the 1.63600 resistance. We also need to note that the weekly candle closed as a bearish bodied spinning top.
Now looking at the daily timeframe below, we can see that price has formed recent lower high and lower low. Price last week broke past the previous lower low.
On Friday we saw price show a bullish day which has retraced back to the area close to 1.58400.
It is also key to take note that our Daily 20 & 50 EMA’s have just crossed over bearish.
Now taking a look at the 4 Hour timeframe we can see that price towards the end of the week lost momentum and struggled to show any real movement. This could now lead price back to the downside.
Currently price seems to be remaining below our daily 20 EMA, with both our EMA’s on the 4 Hour timeframe aligning bearish.
We will now be watching the 2 Hour timeframe on Monday to see if price is going to continue bearish or continue back to the resistance of 1.58400 for a rejection.
Below we have the 2 Hour timeframe where we have highlighted the sideways movement in a box range. We have also drawn on the two options we believe we could see next week.
First of all we could see price break straight out of the 2 Hour box range to the downside and head towards the 1.56750 support.
The other possibility would be for price to break out the box range to the upside and show a rejection off the 50EMA and the 1.58400 resistance before heading down to the 1.56750 support.
If price breaks above the 1.58400 resistance then we will remain patient to see if price rejects for a new lower high or continues to break bullish above the 1.59800 resistance.
Please remember this is our perspective and you should trade alongside you own analysis.
James at Technical FX43