Direct from the desk of Dane Williams,
exclusive to leofinance.io
Key Takeaways:
- EUR/USD and AUD/USD both reject higher time frame resistance.
- Intraday retests of short term support turned resistance for both pairs.
- Under higher time frame resistance, so only playing from the short side.
I've gone a slightly different format for today's daily forex market analysis blog on LeoFinance, combining both EUR/USD and AUD/USD analysis into the one post.
This is because both setups are driven by short term USD strength and the setups on both major pairs are almost carbon copies of one another.
Of course if the fundamental drivers behind the moves are the same, this obviously doubles your risk due to the high correlation between each pair.
So with that in mind, make sure you're managing your risk accordingly and not taking both setup at full size and effectively giving yourself double the exposure that you normally would.
EUR/USD Technical Analysis
Let's start things off with a follow on from yesterday's analysis, showing EUR/USD forming an indecision candle at daily resistance.
We spoke about the Euro looking like it was going to hold the daily resistance zone at 1.20 and therefore our bias was to only be trading the pair from the short side.
Now zoom into an hourly chart and let's take a look at the intraday price action.
EUR/USD Hourly:
Click the link to yesterday's analysis above and you'll actually see that we had placed that blue intraday zone onto our charts already.
It's just a simple area of short term support than when retested as resistance, could be used as a signal to get short.
Well coming back to today's updated chart above, you can see that price has once again rallied back to the zone, allowing those of us that missed the boat the first time around, another opportunity to get short.
Target 1:3 and set your stops according to your risk tolerance, either above the intraday zone if you're aggressive or above the daily zone if you're more conservative.
The fact that the market allowed us to get short so high up in the daily resistance zone means that you can probably be more conservative here and still be able to target 1:3 without requiring a huge momentum move.
AUD/USD Technical Analysis
We now move onto analysis from Tuesday, where we highlighted the AUD/USD intraday triangle breakout had followed through to daily resistance.
In that blog we spoke about the Aussie holding daily resistance and therefore shifting our bias to only playing the pair from the short side as a result.
Take a look at the Aussie intraday chart below and you'll see just how correlated AUD/USD and EUR/USD are.
AUD/USD Hourly:
Being below the higher time frame resistance zone, we took the last area of short term support that when retested as resistance, can be used as an entry.
Yep, exactly the same as always.
This one technically hasn't triggered yet.
But...
Close enough is probably good enough in this case.
Again, it's entirely up to you and your risk profile as a trader.
Best of probabilities to you.
Data to Watch Next Week:
- Monetary Policy Statement (EUR)
- ECB Press Conference (EUR)
- French Flash Services PMI (EUR)
- German Flash Manufacturing PMI (EUR)
- German Flash Services PMI (EUR)
- Anzac Day Bank Holiday (AUD)
Why not leave a comment and share a chart of your own in the comments section below? All comments that add something to the discussion will be upvoted.
This daily market analysis blog is exclusive to leofinance.io.