EURAUD: Prior Target of 1.4355 Hit, Next Stop 1.4150 if Bearish Channel is Re-entered.
The medium term daily candle chart below shows the price history of the Euro Currency (EUR) versus the Australian Dollar (AUD), known as EURAUD, and trading near 1.4299 around time of publication today.
The target near 1.4355 that was discussed in the last post about this pair in the Ideas You Can Trade series, earlier this month, failed to provide any lasting support, and 1.4201 eventually provided a small bounce towards current levels.
Since that low on July 24th, from last week, the pair has slightly broken above the upper line of the medium term bearish channel (point 4 in magenta color on chart below) and appears poised to continue lower with that line now acting as bearish support (as it has before on several occasions).
In addition to 1.4200, which could be revisited very soon, the next support levels appear to be 1.4150 and 1.4050, and on the upside 1.4355 and 1.4445 may act as resistance to further upside over the short term.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.4365 with a Limit to take profit @ 1.4420 and a stop-loss @ 1.4321 Risk/Reward Summary: Limit risk = +55 pips profit / (-44) Stop-loss risk = Gain to Loss ratio = 1.25
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.4198 with a Limit to take profit @ 1.4151 and a stop-loss @ 1.4232 Risk/Reward Summary: Limit risk = +47 pips profit / (-34) Stop-loss risk = Gain to Loss Ratio = 1.38
Medium Term Daily Candle Chart: