EURAUD: After 1.4150, Next Stop 1.4050, as 1.4100 Failing
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 1.4100 around time of publication today.
Last time EURAUD was reviewed in the Ideas You Can Trade series a pullback was expected, and has since gained momentum. Support near 1.4150 failed to hold and now 1.4050 could be next, and EURAUD is already half way there with 1.4100 near current prices.
The longer term view (using daily candles) in the additional chart below shows a longer term support line that could be a further downside target if the bearish momentum pushes under 1.4050.
If 1.4050 is reached and provides enough support to cause a reversal, a double bottom using November's low on that line could mean a floor is established.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.4151 with a Limit to take profit @ 1.4188 and a stop-loss @ 1.4129 Risk/Reward Summary: Limit risk = +37 pips profit / (-22) Stop-loss risk = Gain to Loss ratio = 1.68
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.4076 with a Limit to take profit @ 1.4051 and a stop-loss @ 1.4099 Risk/Reward Summary: Limit risk = +25 pips profit / (-23) Stop-loss risk = Gain to Loss Ratio = 1.08
Medium Term Daily Candle Chart:
Medium Term Daily Candle Chart zoomed out: