Forex Trade Signals and Setups Dec. 13th
AUDUSD – Structurally Continues to Break Down
After forming two inside bars at the 38.2% fib leve, the Aussie pulled back right to the 20ema, whereby it ponged off this level (almost forming an outside candle), and then sold off with impunity, breaking the prior swing lows in the process. This rejection off the 20ema shows sellers were eager to add to positions, while the next candle being more aggressive in its sell-off communicates the impulsiveness of the selling telling you who is in control.
Watch for a possible inside bar break of the lows or a pullback to the 1.0080/1.0100/20ema level for another pullback play to get short but as it stands, we don’t see any price action cues to get long so we are staying short.
EURUSD – Breaks Key Low
After pausing at the prior swing low we mentioned, the pair broke this level and continued to sell off aggressively. We mentioned this just yesterday that should this level break, expect aggressive selling and this is exactly how it played out.
What should be noted is how the reactions off this level were weak communicating via price action that the buyers had little gusto to their punch. Once the lows broke, it was open season with the pair shedding 200pips in less than 8hrs.
Also notice how the price action broke the S3 support/pivot level which statistically does not happen much so this is quite communicative.
Watch for possible corrective/consolidation here but we expect pullbacks to be sold again as the EZone troubles while holidays approaching faster = less likely heavy buyers will enter on the bull side for the Eurozone, hence a likely lower Euro. One possible play is an inside bar play or watch for a pullback to 1.3150.
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