EURAUD has been fairly inactive lately as the pair has been digesting gains made from the recent rally off the May lows. As such I haven’t paid much attention to the pair, but things are starting to get a bit more interesting after yesterday’s price action.
Although the pair has been moving sideways over the last two weeks, the general momentum remains bullish. This is easily identified using our moving averages combined with the fact that the market just put in a higher high as well as what appears to be a higher low.
Given yesterday’s price action the game plan moving forward becomes quite clear. With the 1.4735 level acting as resistance since June 9th, we’ll need to see a daily close above this level before considering a long position.
Of course we will need to wait for the break in order to determine a strategic stop loss placement, but with 265 pips to the target area the risk to reward ratio will more than likely be a favorable one.
Summary: Wait for a daily close above 1.4735 and then watch for a retest of the level as new support. Key resistance comes in at 1.50.