We’re doing a double feature on the Aussie today, forex friends!
What do you think of these setups?
Here’s a nice and simple range play for ya! EUR/AUD is a stone’s throw away from the 1.5650 area that’s been serving as range resistance since early April.
What makes the setup more attractive to the bears today is Stochastic telling us that the euro is overbought on the 4-hour time frame.
Can the bears hold 1.5650 this week? I’m seeing a lot of long wicks at the bottom of the last candlesticks, so y’all be careful about shorting EUR/AUD.
Look out for bearish momentum, which could take the euro back down to the 1.5550 or 1.5480 previous areas of interest.
If euro bulls manage to get enough momentum to pull a breakout above the range, though, then you should also be ready to buy the euro and target inflection points like 1.5690 or 1.5760.
If you’re like me and you’ve been watching AUD/JPY’s breakout from its months-long range, then you gotta know that the pair is back to the 84.70 zone that’s around the broken resistance level.
This time around, 84.70 lines up with a 61.8% Fib retracement of the last upswing AND is a few pips away from the SMAs and a trend line support that’ seen around since late March.
Can the Aussie keep up its bullish momentum against the yen? The bullish divergence on the 4-hour chart suggests it’s possible.
A long trade at current levels would set you up in case AUD/JPY pursues new May highs in the next few days. You can also wait for possible trips to the 100 and 200 SMAs closer to the trend line support if you’re not too sure about the Aussie shooting higher right now.
But what if AUD/JPY trades below the trend line?
Keep your eyes peeled for sustained price action below the 84.70 range resistance and the trend line support, which could open AUD/JPY to possible dips to the 83.60 mid-range or 82.50 range support levels.