Thursday, May 31, 2018

I Expect A Corrective EUR/AUD Move North

The pair has been developing a downward trend since 25th April 2018, and for a little over a month it depreciated with almost 700 pips. For the past two weeks (in the second half of the depreciation) the movement was within a perfectly formed trend channel.

On the D1 time frame we can see that the price has moved outside the channel and two already closed bars – a doji and a spinning top – are the first signals for a possible correction to the upside.

On the H4 time frame there is a RSI divergence which is the next signal for the beginning of a possible correction.

This is my reasoning for the expected correction.
If the pair reaches the limit of the divergence it should rally to 1.5650-1.5680.