Yesterday I wrote “The EURAUD rallied strongly from the August low below 1.4450 to a high at 1.5065 last Thursday (September 14). The high was capped for three days by the 200 DMA, and the subsequent fall broke the 20 DMA yesterday. This three candle down move and break and hold of the 20 DMA on the Daily timeframe, triggered a SHORT position at 1.4820, with Target 1 at 1.4700 and Target 2 at 1.4580.
The strong down move continued yesterday. Target 1 at the psychological 1.4700, and the 50 DMA were breached earlier today for a gain of 120 pips. If the pair close today below the 1.4700 level and the Parabolic SAR remains positive then further downside to Target 2 (1.4580) is possible. Today would be the 5th strong down day following the rejection of the 200 DMA on September 15, so some relief in the down move could be expected, the short term stochastics are over sold.
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