EURAUD – That shooting star can be crucial here
On many instruments, last week ended with interesting trading signals, mostly thanks to the Thursday’s flash crash on Yen. The Japanese currency was not the only one affected. As it happened during the Asian session, AUD and NZD, where also hit with the higher volatility. In today’s piece, we will focus on the EURAUD, which is having a very interesting setup, especially for the retail traders, like this one, is the counter trend trading opportunity.
This setup can be found on the weekly chart, where we can see a very strong upswing. The uptrend started in the 2012 and there are some chances that it will end soon or maybe even ended in the last week. Why do we think so? Look at the weekly candle from the previous week. It is a beautiful shooting star, with a very long head. Yes, a candle alone is very handsome but in this case, it is all about location, location, and location. Shooting star bounced from the highs from 2015, 2016 and 2018 (yellow). That is possibly the best place for a reversal ever.
Let’s take some break from the trend following and try this scenario. As long as the price stays below the yellow area, the sentiment is negative. As for the targets, the first one is the blue up trendline and the second one is the horizontal support on the green area. Reaching the first one should be relatively easy.
This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis