EURAUD Online Forex Trading Correction Pattern – Sept 9, 2014

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EURAUD Online Forex Trading Correction Pattern - Sept 9, 2014

EURAUD Online Forex Trading Correction Pattern - Sept 9, 2014

EURAUD has suffered a very sharp online forex trading selloff recently, yet price has found support at the 1.3800 major psychological level and is prime for a correction. The recent strong rally suggests that traders are also closing their recent short positions and may be looking to hop in the selloff at a better price.

Using the Fibonacci retracement tool on the latest selloff shows that the 38.2% level lines up with the 1.3950 minor psychological online forex trading resistance, which might keep any gains in check. A higher retracement could last until the 50% level, which is close to the 1.4000 major psychological level. Meanwhile, the 61.8% Fibonacci retracement level could also hold as resistance since this lines up with a former support zone.

Online Forex Trading Outlook

A selloff from any of the Fibonacci retracement levels could lead to a selloff back to the 1.3800 handle or lower. The pair is in a longer-term online forex trading downtrend after all and further declines could lead all the way down to the 1.3500 major psychological support area.

On the other hand, a change in online forex trading sentiment could see EURAUD back to its previous highs at the 1.4200 major psychological resistance. This might signify a breakout from the recent downtrend though and it would take a strong economic catalyst to lead to this event.

For now, fundamentals are not in favor of the euro, as the ECB recently cut several interest rates and led to strong online forex trading selling pressure for the shared currency. In addition, ECB Governor Draghi said that they are looking to implement purchases of asset-backed securities and targeted long-term refinancing operations in order to boost economic activity.

Meanwhile, the Australian dollar could see additional online forex trading volatility later this week with the Australian jobs release. A strong figure might be enough to push EURAUD back on its selloff.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.