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EURAUD Pullback to Gain Steam Below 1.6050

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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.

On Tuesday of last week, I pointed out a key resistance area on EURAUD. At the time, buyers had reclaimed control after bouncing off of support at 1.6050.

The resistance area of interest was between 1.6230 and 1.6250. That’s the location of the ascending channel top that extends from the July high.

It became clear the September 7th breakout was false when the pair closed back inside the channel on the 18th. That wasn’t a surprise though as an upside break of an ascending pattern like this often results in a false move.

Here’s the chart I posted last Tuesday:

EURAUD daily time frame

I entered short on the 24th at 1.6232. It’s an entry I announced inside the member’s area and one that came 24 hours before last week’s commentary on this website.

There was no bearish price action at 1.6230/50. However, I reduced my position size quite a bit and felt comfortable with the trade idea knowing that a false break to one side of a pattern often results in an extended move in the opposite direction.

Another level I mentioned last week was 1.6050 support. The area attracted buyers on September 4th and again on the 20th, so it was logical to assume it would do so again.

Sure enough, EURAUD caught a bid at 1.6050 before the weekend. The area is also attracting a few buyers so far this week.

This is likely a temporary pause though. Last month’s false break of channel resistance has yet to play out fully in my opinion. As discussed last week, the confluence of support at 1.5860 appears to be the primary target for sellers.

However, keep in mind that it’s going to take a daily close (New York 5 pm EST) below 1.6050 to expose the 1.5860 region. As long as EURAUD remains above 1.6050, we’ll continue to see the area attract a bid.

There is also another much larger and significant pattern developing here as well. I’ve already shared it with members but will likely post an update on this site if things continue to unfold as anticipated.

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EURAUD false break of channel

Leave a Comment:

11 comments
alfredo cawating says

good set up

Reply
Muhammad Arbaz says

there is small mistake in article instead of EURUSD its typed EURAUD.
just trying to clear any confusion.
Take care

Reply
    Muhammad Arbaz says

    sorry wrong post wrong message

    Reply
Peter Pel says

This setup has been a nice ride. Thank you Justin for such a great work.

Reply
    Justin Bennett says

    You’re welcome. So far, so good.

    Reply
Sera says

👍 thank you Mr spot on

Reply
    Justin Bennett says

    Anytime, Sera.

    Reply
Lương Kiều Sơn says

Cám ơn thầy nhiều! tôi sẽ sắp xếp ôn lại anh văn, để đăng ký khóa học của thầy. Chúc thầy nhiều sức khỏe.

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Siyabonga Mkhize says

Cheers

Reply
Flora says

Great article
Sold EurAud, though it’s been moving sideways, still holding on it

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Vegeta says

Hey Justin,

I notice the weekly and monthly EMA are below current price, although not by too much.

The EURAUD closed back above 1.60500. However, it didn’t touch the high of the breakout bar.

Would we now close this since it closed above 1.60500 and that level of support did not turn to resistance, or do we wait for 10pips above the high of the breakout bar to be touched to give the support another chance to turn to resistance?

Thanks!

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