Selling this EUR/AUD resistance zone gave day traders a short term bounce, but the bearish momentum was short lived and price subsequently rallied hard through the level.
Just from reading the online trading community’s thoughts, I can see plenty of chatter around about buying these pullbacks and if this is your view, then this daily support level is key. It’s certainly crunch time for the bulls.
I’ve only included a single, hard line but as you can see when you look back to the left side of that chart, there is plenty of long wicks and chop here and there. That is just the price action nature of a forex cross such as EUR/AUD and highlights the risk management mentality that you have to have to trade these types of pairs successfully.
With this in mind, when a day trader zooms into an intraday chart, they still have to come up with a strict risk management plan which should involve the short term levels that have most recently been tested. These levels can’t be zones like the higher time frame because we need a hard number to take entries or set stops around.
After zooming in, what have you come up with?
If you’re trading EUR/AUD then screenshot your chart and be sure to mention @VantageFX on Twitter to contribute to the discussion.
Best of probabilities to you!
Dane Williams – @VantageFX
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