EUR/AUD displaying weakness. Looking for a fall!

1 juil. 2018

EUR/AUD is displaying a lot of weakness, and while it seems weird to buy the Aussie, the weakness is unmissable. The only thing that will prevent a drop is some positive news (although nothing is predicted at this point).

We have massive momentum divergence on the H4 (and replicated on the D1 as of Friday), plus bearish Money Flow Index divergence as buyers slowly exit the market.

Big falls are often preceded by a last gasp burst (potentially to the Monthly R3), so I'm keeping an eye out for that before shorting EA.

This trade lines up in a lot of ways, as the overall trend of the EUR/AUD is down over the last year or so. But, as always, we have to wait for clear confirmation. You're better off sacrificing some profit rather than getting in on a bad trade.

Check out the Weekly chart for further indication that we should be looking for a down movement:

1 juil. 2018

Note

Typo, the trend for EUR/AUD obviously ISN'T down over the last year (just the last few months :) )

3 juil. 2018

Note

EUR/AUD has continued rising, as expected. We're now looking for price to test a trifecta of resistance triggers. See the below chart.

4 juil. 2018

Note

EUR/AUD hit the monthly R4 CAM and promptly fell 100 pips, which was unexpected (but shows the power of CAM pivots). It's stabilized at 1.5770 level, likely due to a stack of volume sitting in that area.

I'm still expecting it to rise and challenge the yearly R4 at 1.6000, but it's worth keeping an eye on for further falls. The expected weakness may have hit sooner.

Trading is never an exact science :)