h2>Daily Set Up: EURAUD Trading The Channel
Daily Set Up: EUR has come under a little pressure this week as it retraces the breakout above important resistance this past Friday. The selloff has been drive on post holiday profit taking, optimism around US tax reform and some less dovish comments from the incoming Fed Chair.
AUD hasn’t been able to take much advantage of a recent slide in the US Dollar as worry out of China over a frothy equity market and renewed geopolitical tension with North Korea hangs over the risk correlated currency’s head. This follows a week of mild recovery for the Australian Dollar, with the currency getting a boost from the intense wave of US Dollar bearishness on the back of upgraded Fed concerns about prolonged subdued inflation and discouraging US economic data
Trade Idea: I am monitoring price action in EURAUD as price has continued to stall as it tests ascending trend line resistance towards 1.57 as this level continues to repel the advance there is the potential for price to pull back and retest its upside break point back towards 1.54 and ascending trend channel support at 1.52 in extension, as such I have placed sell stop orders on a break of yesterdays bearish reversal candle. If price plays out as projected I will reassess the price action on a test of trend channel support as a possible reversal play to set longs as highlighted in the chart below.