The EUR/AUD pair had a very positive session on Tuesday, but as you can see we are coming up upon what used to be significant support at the 1.42 level. Because of this, I believe that there will be selling pressure as this has been such a nice downtrend, and I also recognize that it really is and until we clear 1.45 that one can say the trend is changing. That being the case, I suspect that the Euro will continue to be sold off in general, and as a result the EUR/AUD pair will go lower, and this of course will put pressure on this particular market as well.
The Australian dollar continues to be relatively flat while the Euro has been falling apart. Ultimately, this will come into play, and this market will continue to fall. I believe that the 1.40 level will be targeted, and as a result this market should continue to have a lot of bearish pressure.
Rallies will continue to be selling opportunities.
I believe that the short-term charts will be the way to go, and even though we closed at the very top of the candle for the session on Tuesday, I think that the sellers are going to step been relatively soon. I might let the Wednesday session coming go before I decided make any trades, but at the end of the day I feel that the trend is far too strong to think it’s going to change at this point. Besides, the European Union is having issues with possible deflation, and that is without a doubt one of the biggest killers of currency value. The Australian dollar at least has the ability to claim that it has export potential to Asia, whilst the European Union can’t claim the same benefits.
Ultimately, I believe that the 1.40 level will give way, and we will probably go as low as 1.35 given enough time. It might be a bumpy ride, but I see no serious potential of going long of this market, simply because you would have to believe that the Euro is going to continue going higher in general.
