EURAUD: Low of 1.4617 Reached Today as April's Low of 1.4649 Failed To Support
The medium term daily candle chart below shows the history of the Euro Currency (EUR) versus the Australian Dollar (AUD), known as EURAUS, and trading near 1.4639 around time of publication today. Earlier today the pair traded down to 1.4617, and has since returned near current prices, as support seems to have been established just above 1.4000.
The pair is well off its January high under 1.6000, and after failing to hold above 1.5000 last month, after a low of 1.4649 was reached in April, the trend has since turned downwards again and pushing below that prior low - just earlier today. The overall predominantly bullish trend, discussed last year, is losing its hold on the upward momentum, with the most recent price action being bearish, for 2014 so far.
As support will either build or falter around 1.4600, traders may be looking at this level to see if the EURAUD can hold, or if it will push even lower, with 1.4300 a potential next step if the steep short term drop continues.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.4711 with a Limit to take profit @ 1.4766 and a stop-loss @ 1.4671 Risk/Reward Summary: Limit risk = +55 pips profit / (-40) Stop-loss risk = Gain to Loss ratio = 1.37
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.4598 with a Limit to take profit @ 1.4571 and a stop-loss @ 1.4619 Risk/Reward Summary: Limit risk = +27 pips profit / (-21) Stop-loss risk = Gain to Loss Ratio = 1.28
Medium Term Daily Candle Chart: