EUR/AUD has been in a strong forex trading online downtrend, with the falling trend line connecting the highs of the price on the 4-hour time frame still intact. Stochastic is in the overbought zone, indicating that bulls are already exhausted. A move below the 80.00 level would suggest that selling forex trading online momentum is about to pick up and that price would head south.
The 61.8% and 50% Fibonacci forex trading online retracement levels are closer to the trend line resistance, with the former coinciding with a broken support zone. A bearish divergence appears to be forming, as stochastic made higher highs while price made lower highs, supporting the idea of a forex trading online trend continuation.
Shorting at 1.4600 with a wide stop of 150 pips above the trend line and a target of 1.4400 or the previous lows could yield more than a 1:1 return on risk.
Forex Trading Online Forecast
There are no major forex trading online reports due from either the euro zone or Australia today, leaving the overall trend to carry on. Positive interest rate differential between the central banks of the two countries could encourage traders to short the pair again.
Earlier today, Australia reported a decline in its CB leading index of 0.1%, indicating that economic conditions are likely to worsen. Aside from that, the government spending cuts that are aimed at trimming the budget deficit are likely to weigh on overall economic activity. These cuts will be applied to welfare, pensions, and higher education – all of which might lead to lower disposable income among Australians.
As for the euro zone, German ZEW economic expectations printed a sharp decline yesterday while the region’s ZEW figure showed a small improvement, not enough to meet the market consensus.
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