FX Reversals: EUR/AUD Breaks Support
Dailyfx | Jul 23, 2014 01:09PM ET
- EUR/AUD opens US trading below S4
- A bias towards lower lows remains under 1.4257
- A move above 1.4296 would signal a potential false breakout
(Created using FXCM’s Marketscope 2.0 charts)
The EUR/AUD began its sharp overnight decline on Aussie CPI data coming out in line with expectations. Price began to immediately drop, and move below trading range support at 1.4296. The end result was price breaking out and now trading under the S4 support line found at 1.4257. As price continues to move towards lower lows, breakout and trend traders will look to take advantage of the currency pairs continued downside momentum.
Price of the EUR/AUD has repeatedly tested the S4 line of support, and Breakout traders should always be aware of the potential for a false breakout. A move back above the S3 Camarilla pivot point, would signal another price reversal for the day and an end to current market conditions. At this point, breakout and momentum trading should be concluded and traders can consider fresh entries with the markets new influenced direction.
---Written by Walker England, Trading Instructor
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