Hello Traders,
Today’s RBA was widely expected to retain their interest rates at 1.5% and that is exactly what they did, retain and remained positive of the future growth. As a result of the general sentiment and projections, the AUD gained and this was actually a follow through of the earlier released Q1 current account deficit which was actually on the plus. Prior to this, the AUD was on the receiving end and why not, most investors and businesses attribute the recent Euro rise as a positive and indicative of growth and inflation. Matter of fact, data shows investor confidence is at a 10 year high with unemployment declining and more capital inflow as their equities rise. Further, on Thursday, the ECB during their rate announcement, Mario Draghi is expected to maintain a hawkish stance and at least remain upbeat about ECB’s forward guidance and most importantly if they have any plans of continuing with the ultra accommodative policy and taper QE as the central bank seek to jerk inflation from their current levels.
Back to the chart and it’s my opinion that we continue enjoying the benefits of positive OCR differentials while buying the Aud. As you can see from the daily chart, the double pattern reversal candlestick was formed and confirmed yesterday with a clear sell signal printed by the stochastics. If anything else, the weekly stochastics are overbought and the trade should be nullified if prices reverse and close above yesterday’s highs of 1.5180.
Trade as follows:
Sell: 1.5030
Stop Loss: 1.51-Today’s highs
Take Profit: 1.48-region of support-or a 1:3 risk reward ratio
For today, watch the Jolts job opening from the US. It is not a market mover but can provide even better entry opportunities.
Have a good trading day

euraud daily chart-06.06.2017

Source: Dalmas Ngetich

euraud weekly chart-06.06.2017

Source: Dalmas Ngetich

6 thoughts on “EURAUD DAILY ANALYSIS FOR 06.06.2017”

  1. Maryna says:

    Hey Dalmas, I’m watching for the 1.4990 level to break as this price has been an obstacle many times before. Your thoughts?

    1. Dalmas Ngetich - FOREX.TODAY says:

      Hi Maryna, should have answered this earlier before that strong bear candlestick broke through it in the Asian session-check it out in the 1HR chart. My thoughts? well, I think 1.4990 will be a really good short entry level and might be the new support turned resistance level. enter short with stop levels above 1.5040 for a good 1:2-3 risk reward ratio.

      1. Maryna says:

        Hey Dalmas, I placed a pending order which triggered in Asian session and banked 54p. I take the trades as intra-day trades only, so I’m waiting to re-enter again and to watch for a possible re-test of 1.4990 to confirm it is now a resistance. Thanks for taking the time to respond to me!

  2. Alysa Sage says:

    Hey, Dalmas,

    Thanks for putting some insight into the EURAUD. I don’t really trade that yet, but I’m trying to understand the Euro more. I’m still uncertain about the Euro QE policy. A positive is definitely the short term carry trade because of the interest rates, and with the Aussie gaining a little strength, it could be all around profitable. I have been noticing that the Stochs need to align on multiple TF to ensure a safe entry. But, wouldn’t the smaller TF have to cross first before the longer time frames? I would like any input and analysis you have; just trying to learn the market as best as possible. I’ll be doing research today and trying to keep up with some analysis. Thank you for your post and research! Happy trading!

    1. Dalmas Ngetich - FOREX.TODAY says:

      For sure Sage. Yes indeed, a 14 period stochastic in the daily chart will print buy or sell signal faster than the same settings in the weekly chart. As you can see, my daily chart stochastic has printed a sell signal while the weekly is turning slowly in the overbought territory. the safe route for this then is to go south in the 1HR-4HR TF because the higher time frame momentum dictates the lower time frame general trends. Tomorrow though there should be movement especially the GBP and Eur, so watch out for that.

      1. Alysa Sage says:

        Thank you for clearing it up for me. I’m going to keep looking out for that and I’m keeping my eye on the volatility tomorrow.

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