Although the Euro remains under pressure, there are two currencies that are in fact weaker than the single currency at the present time.
I mentioned EURAUD and EURCAD on July 6th as both pairs had confirmed breakout scenarios that called for higher prices. Since that commentary, EURAUD is trading 150 pips higher while EURCAD has gained 110 pips.
While I am by no means bullish on the Euro, I am more bearish on the Australian dollar and Canadian dollar than I am on the Euro. That and the technical patterns on the two pairs mentioned above have hinted at the idea that further gains are probable.
I should point out that in terms of the most favorable place to park your trading capital these days, I still have to favor the Yen crosses. More specifically NZDJPY, AUDJPY and CADJPY, all of which have been mentioned several times in recent weeks.
This does not mean that EURAUD and EURCAD lack potential, as their current structure does look favorable for the bulls, at least in the short-term. However the Yen crosses are likely to offer more follow-through on a mid to long-term basis.
Summary: EURAUD is too extended at the current time to justify a long position. A daily close above trend line resistance would expose 1.5130 and possibly 1.5330. EURCAD looks firm above former trend line resistance. A daily close above 1.4070 could extend gains to 1.4212. Measured objective from the inverse head and shoulders sits at 1.4490.
EURAUD daily chart
EURCAD daily chart
