$EURAUD flirts with a big breakout

This is no surprise to see the $EURUSD and many Euro pairs breaking higher,  but the $EURAUD move is a standard technical breakout that I like best in terms of measuring the next step higher. This is very important to gauging your risk, which comes down to position sizing based on the potential target level(s) against he potential stop levels. The EURAUD pair offers a great set up based on the average True Range of the pair measured against the range expansion bars that developed yesterday and last night. Add the wedge clean break from last December  &  October highs and we can see the target(s) in pain view for a move to 1.3025-40 levels  marked in May.

From the chart below, we can see a simple technical breakout of the wedge. We also see the price has moved off the August lows back to the 2/3’s point. The orange line is a measuring stick of 60 bars (days bars) and 1380 pips from highs to lows.

In addition to support the breakout is a strong RSI on both a day and week chart as the 50 day MA continues to slope upwards after a long period of flat line action along the mid-point of the wedge.  I plotted my next resistance level that will pose a big problem at the 1.3326 spot which coincides with the midpoint of that big red weekly bar from 11/27/11. Watch the RSI for a higher move against the peaks of the old highs (see my circles on RSI).

Daily bar chart_$EURAUD

Daily bar chart_$EURAUD

The risk here is a failed breakout and a move to close below 1.2650. This level must offer support at any test in terms of closing prices.

Week Bars: The chart below is a weekly bar that gives us a really nice pattern to support the RSI, 50 period MA and wedge break. More importantly, is the inverse head & shoulder stands out like a sore thumb. Next higher targets are in range for a longer term trade also.

$EURAUD_WEEK

Nick Pirraglia

@Liquid_Trader

TradersThinkTank

About Nickolas Pirraglia

Nick Pirraglia started his career in trading in 1991 after returning to the US as an Army Officer deployed in Iraq. He began as a bond broker and worked his way into trading. Expert mentoring, hard work and a disciplined approach to the markets has allowed Nick the ability to maintain a very successful career in Capital Markets and Trading for over 20 years as a professional OTC Market Maker and independent trader. Nick has also managed the trading desks for a two Dallas based capital management companies and traded equities for a Dallas based hedge fund. Nick has trained and mentored thousands of customers in the rigors of trading, technical analysis and risk controls. Recently, Nick had broadened his market experience through the design and product management of two automated trading platforms. He has the pleasure of working with some of the brightest minds in the trading community and has collaborated with experts in data, design, engineering and trading psychology. An avid long distance runner, Nick completed several marathon events, qualified for the Boston marathon, completed several long distance Triathlons to include finishing a full Ironman triathlon.
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2 Responses to $EURAUD flirts with a big breakout

  1. Kenneth L. Bednark says:

    Hi Nick, Thanks for taking the time and effort to produce these commentaries. Really miss listening to you on webinars; your keen market insight has help me become a better trader. Wondered if you intend to conduct any of your own webinars? If socount me in. Best regards, Ken

    Kenneth L. Bednark kennyb@umich.edu

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