In today’s live trading session, we went over our profits made from our AUDJPY trade, and then we discussed a possible trade idea for EURAUD.
During yesterday’s live session, we broke down why we thought AUDJPY was set to head lower. It was mainly based on what price action was telling us, along with forecasts of poor unemployment data for the Aussie. Our analysis turned out to be correct, as the pair melted over +110 pips to the downside. We have since then gotten out of the trade and have shifted our focus to other pairs.
This morning we determined a bearish bias for the DXY, as it is using a previous high as resistance. Based on this, it is imperative to say that AUDUSD should rise. If this were to happen, it is also imperative to say that EURAUD would go lower. This is due to the correlation between the index, the major, and the minor currency. Technical analysis shows that EURAUD has run into a solid 4hr resistance and is showing signs of weakness, and due to all of these confluences, we are looking to short EURAUD.
One of the reasons why our AUDJPY was such a success, was because the DXY is trending again. Remember, a US Dollar that is alive and active results in favorable trading conditions. Let’s see if this can persist until the end of the week. As always, be safe and trade responsibly!