Daily Price Action
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EURAUD: Direction of Range Break Has Broad Implications

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

Since closing above 1.5720 on June 25th, the EURAUD has been limited to a 150 pip range. The resistance area at 1.5870 has been just as formidable as range support at 1.5720.

It’s been a range traders dream. Those who have sold at resistance and bought at support since late June have gotten it right every time, except for maybe the July 19th intraday decline that stopped out a few longs.

I mentioned it a while back, but it’s worth restating that the pair is at a crossroads. On the one hand, the short-term trend is up, and on the other, the price action since last November has carved a possible topping pattern.

EURAUD pending head and shoulders

So far, the EURAUD has completed the left shoulder and head of the structure. However, the 150 pip range that’s formed over the last few weeks has delayed the formation of the right shoulder.

As it is, the pending head and shoulders pattern is far from complete. In fact, it’s more than 400 pips above the neckline, which is what would need to break down in order to confirm the reversal.

This suggests that a breakout from the current range between 1.5720 and 1.5870 has broad implications. A break higher would likely negate the pending reversal in the chart above.

On the other hand, a daily close (New York 5 pm EST) below 1.5720 would put sellers one step closer to confirming the 1,000 pip structure.

As for key levels beyond the current range, a close above 1.5870 would expose the 1.6000 handle. Alternatively, a close below range support at 1.5720 would open the door to the 1.5620 area.

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EURAUD range on the daily time frame

Leave a Comment:

17 comments
Deogratius says

I think this pair for long timeframe like D1, Weakly and Monthly is for buy.

Reply
    johnson says

    you are wrong man, its just a consolidation,

    Reply
      Howard says

      Meanwhile I’m playing it as a range trade.

      Reply
      Saviola says

      yes you are ryt johnson

      Reply
Rene says

On GBPAUD I see same Head and shoulders pattern, or not?

Reply
    jerry says

    yes, it is a POSSIBLE structure!

    Reply
    Justin Bennett says

    Yes, I’ve mentioned it before. See the daily and weekly commentary over the last couple weeks.

    Reply
papi says

Hi Justin, would you say that GBP/CHF has formed a broadening wedge

Reply
    Justin Bennett says

    I tend to stay away from the Swiss franc.

    Reply
      papi says

      If I may ask Justin, what is the reason you tend to stay away from swiss franc

      Reply
        Justin Bennett says

        Choppy price action and SNB games.

        Reply
          papi says

          Okay, thank you. i appreciate the educational content on you site, its very helpful

          Reply
Howard says

On 7/30, price may close near top of daily range (about 1.5800).
If ranging continues, 7/31 may be reversal to near bottom of range (about 1.5730). Short term opportunity for 50 to 70 pips.

Reply
Pierre Mifsud says

It is very clear from wave harmonics on the weekly timeframe that it is heading for 1.60112 handle….I do not see any crossroads here….thereafter it should retest the 1.5262 handle

Reply
    Justin Bennett says

    Hubris…can be more damaging than greed or fear.

    Reply
      jerry says

      justin! you even teach me new vocabularies (hubris) hahaha. thanks a lot

      Reply
thivanka98 says

Already lock in profit. Hope to scale in with retests.. thanks coach.

Reply
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