EURAUD: Support on 1.4355 Tested Again as Bearish Price Action Returns
The medium term daily candle chart below shows the price history of the Euro Currency (EUR) versus the Australian Dollar (AUD). This currency pair is known as EURAUD, and is trading near 1.4363 around time of publication today.
Over the last few weeks the pair has attempted to sustain the bullish momentum that had developed since the most recent breakout to the upside of the medium term bearish channel (point 4 in magenta color on chart below).
While that bullish momentum has since persisted, it has been counter-balanced with brief pullbacks, and thus created a range between 1.4280 and just under 1.4500. The former of these levels appears to be imminent where such a pullback may target (near 1.4280).
Last time this pair was reviewed in the Ideas You Can Trade series, EURAUD was described as still facing bearish resistance.
Whereas, the support near 1.4355 where the pair is trading around today could first act as a barrier to further downside, and provide a lift higher with 1.4545 an upside target.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.4481 with a Limit to take profit @ 1.4522 and a stop-loss @ 1.4441 Risk/Reward Summary: Limit risk = +41 pips profit / (-40) Stop-loss risk = Gain to Loss ratio = 1.02
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.4338 with a Limit to take profit @ 1.4278 and a stop-loss @ 1.4398 Risk/Reward Summary: Limit risk = +60 pips profit / (-60) Stop-loss risk = Gain to Loss Ratio = 1.00
Medium Term Daily Candle Chart: