The euro has been stabilizing on Monday against the Aussie dollar, despite the fact that Friday was so tough for this pair. At this point, range-bound is my thought.
EUR/AUD
The euro fell pretty significantly on Friday against the Aussie dollar, but we are seeing some stabilizing action here on Monday. And that suggests to me that we are looking at this through the prism of a range-bound market, and that continues to be, I think, the way forward here.
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I'm watching the Stochastic Oscillator for hints as well, but overall, I think we have to look at this as a market that is just simply hanging around, trying to find the next catalyst. After all, the Australian dollar is a little stretched against the US dollar, and the euro on the other hand has to worry about things like whether or not they are going to be trying to figure out whether or not energy is a major problem or if it's a non-factor.
In this scenario right now, I do think energy comes into play eventually when it comes to the European Union, and that's part of what we may have been seeing since the war kicked off.
Range Boundaries and Support Levels
That being said, from a longer-term standpoint, it is worth noting that we are basically sitting on pretty significant support. If this market were to break down about another 300 pips, then you could see a massive sell-off.
Right now, though, I think we're just hanging around between 1.6150 and 1.66. We're basically in the middle, but we've seen support here recently. Short-term traders will probably be looking for a bounce to go long for a day, maybe two, and then bail again on the trade, just going back and forth over and over, at least until something changes.
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