Traditional EUR/AUD is a big mover currency pair and always offers wide wide ranges to allow big movements. Inside EUR/AUD’s price reveals more range trading ahead as current prices overall doesn’t reveal a big move ahead in either up or down direction. Why is due to EUR/AUD Correlation to EUR/USD at + 45% and minus 98% to AUD/USD. At current Correlations, EUR/AUD lacks the impetus for the big move.
From current 1.4584, the next big breaks above are located at 1.4799, 1.5022 and 1.5081. All are big breaks and all would see EUR/AUD gain speed to the upside. The downside big point break is found at 1.4025.
The problem in current prices and why ranges is location. From current 1.4584, trends begin at 1.4962 and 1.5270 above Vs 1.4775 and 1.4636 below.
On a break of 1.4799, price must remain above 1.4775 then next breaks are located at 1.4819, 1.4839, 1.4859, 1.4880. 1.4921, 1.4941 and 1.4962 where the uptrend begins. This means 1.5022 and 1.5088 should break easily as those prices are direct inside the overall price path. The target on a break of 1.4962 is 1.5100’s.
On the downside breaks of 1.4775 and 1.4636 then next comes 1.4702, 1.4658, 1.4641, 1.4618, 1.4595, 1.4558, 1.4547, 1.4489 and 1.4450.
Overall, any price in the 1.4400’s are severely oversold and best potential overall is higher for EUR/AUD. Where should the range be located? 1. 4911 to 1.4712, buy dips is best strategy.
Brian Twomey, Inside the Currency Market, btwomey.com