The EURAUD Closes In On Overbought Levels

The EURAUD has been one of the markets dominant trends, declining 6010 pips from its 2008 high. Most recently the pair has pressed to all-time lows at 1.1604, dropping another 1419 pips from its May high of 1.3029. With prices on the EURAUD pointing considerably downward, trend traders should have a preference to sell. Even though we know we are looking to sell, it can be difficult pinpointing an opportunity to enter into the market. To help with this, indicators know as oscillators can be employed to spot perspective trades. Today we will focus on using RSI in conjuncture with the EURAUD downtrend.

The_EURAUD_Closes_In_On_Overbought_Levels_body_Picture_2.png, The EURAUD Closes In On Overbought Levels

(Created using FXCM’s Marketscope 2.0 charts)

Now that the trend has been established to the downside we can start looking for overbought and levels by applying RSI to our daily chart below. Using RSI with the traditional 14 period setting, is a great tool for this purpose as it is designed to find pullbacks against the trend using overbought and oversold levels. Traders in this example,will wait for a pullback causing RSI to read over 70 and execute as momentum begins to head lower. Circled below, we can see four previous examples of this occurance on a daily chart.

It is important to notice that RSI is not currently in overbought territory. With a reading of 63 traders are still waiting for a candle close to bring the indicator over 70 before considering new sell entries. Once 70 has been reached, traders can prepare for execution when the indicator moves back below these levels.

The_EURAUD_Closes_In_On_Overbought_Levels_body_Picture_1.png, The EURAUD Closes In On Overbought Levels

(Created using FXCM’s Marketscope 2.0 charts)

Using the RSI with the chart mentioned above, my preference is to sell the EURAUD on a turn from overbought territory. Entries can target fresh lows for profit targets under 1.1610 or better. Depending on where RSI creates a selling signal, traders can then extrapolate a 1:2 or better Risk/Reward level.

---Written by Walker England, Trading Instructor

To contact Walker, email . Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list, send an email with the subject line “Distribution List” to .

Take this free 15 minute “RSI Training” course presented by DailyFX Education. In the course, you will learn about the basics of RSI, and how to determine entries in trending markets.

Register HERE to start your FOREX training now!

DailyFX providesforex newson the economic reports and political events that influence the currency market. Learncurrency tradingwith a free practice account and charts from FXCM.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk

Latest News

  • TCS net profit rises 51.5 percent, sees stronger sales growth

    Tata Consultancy Services Ltd (TCS.NS), India's largest IT services exporter, expects a further rise in revenue growth in the new financial year, it said on Wednesday, after reporting a better than expected 51.5 percent increase in the last three months. Over the last two years TCS has been increasing its profits at a faster pace than local rivals Infosys Ltd (INFY.NS) and Wipro Ltd (WIPR.NS), which have been distracted by management revamps and strategy changes. TCS, which posted a near 30 …

  • Order for release on interim bail unworkable: Subrata Roy to SC

    New Delhi, April 16 (IANS) Sahara Group chief Subrata Roy Wednesday told the Supreme Court that its order sending him to judicial custody and the conditions to secure his release on interim bail was "unworkable". "The court passed an order that was unworkable" and was without scrupulously following the laid down procedures, Roy's counsel Rajiv Dhawan told the bench of Justice K.S. Radhakrishnan and Justice Jagdish Singh Khehar. As Dhawan said Roy could not generate money as his bank accounts …

  • Complete drain de-silting work by May 15: Jung

    New Delhi, April 16 (IANS) Delhi Lieutenant Governor Najeeb Jung Wednesday instructed senior state officials and municipal commissioners to finish de-silting of drains by May 15 and buckle up before the monsoon sets in. …

  • Buff & Hensman's 1959 Halverson Residence Asks $1.795M

    Click here to view the full photogallery. L.A.'s much-balconied 1959 Halverson Residence #1 has resurfaced on the market, just eight months after purportedly selling. Public records indicate that the Buff & Hensman-designed "architectural gem," or so the brokerbabble dubs... …

  • Entrepreneurs Seeking a Place to Start a Business Find a Surprising Answer: …

    An urban area filled with empty buildings and an underused labor force offers some powerful advantages but it also has its challenges. …


  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Seed of Doubt

    Field trials have been allowed again in India. But two decades after their global launch, genetically modified (GM) crops remain controversial. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …


  • Most Actives
    Most Actives
    NamePriceChange% Chg
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

      Sign-in to view quotes in your portfolios.

    Yahoo Cricket