The following is is the hourly chart of EURAUD as of Dec. 28th, 12 AM EST. If you observe the graph you can see that
1) A support line is formed (trend line).
2) CCI has reached below -100 which is oversold region.
3) Stochastics oscillator also reached below 20 which is the oversold region.
I am thinking that the hourly graph may reach the trend line where the trend line acts as a strong support for it and then it will reverse back. I don’t think that it will break the support line as the CCI and Stochastics are already in the oversold region. I am thinking the reversal will happen at or after the beginning of the London market which is at 3AM in the EST time zone.
So the following are the different conditions I can think of for entering the long trade for this currency pair.
1) If a bullish engulfing candles ticks are formed at the resistance line at after the beginning of the London market.
2) When the CCI and Stochasticks try to cross above the oversold region at or after the London market start.
euraud hourly chart on a trend line
Observe the four hour graph also. You can clearly see that the four hour graph also on a trend line. Also the CCI and Stochastics have already reached the oversold region. So for this four hour chart also there is a very good opportunity to enter a long trade. I can think of the same different conditions I mentioned for hourly chart for entering the long trade. Check the following four hour graph.
euraud four hour chart on a trend line
Ok. The following is the update on the trading opportunity I described above. Today is Dec. 29th, 3 AM EST. If you observer the four hour chart and one hour chart you can see that both the chart have broken the trend lines. Since the London market has already started I am expecting these currency pairs to still go down. Check the following picture for this currency pair four hour chart.
The following is as of DEC. 30th, 3AM. The Trend line broken by the EURAUD four hour chart has went down almost 150 pips. Check the following picture.
