The Euro won the long "tug of war" battle between it and the Aussie dollar overnight. The pair broke higher out of that ever tightening consolidation range. I told you it would be within the next few days. Well, there you have it. Both currencies have fared well, but the euro won this round in the EUR/AUD pair. Check out the chart below. Click on it to enlarge it.
The Euro "strong arms" the Aussie dollar.
Look to things like this to see if you should be long the EUR/USD or the AUD/USD for instance. This tells you that right now, you'd be better off trading the EUR/USD since its a bit stronger at the moment whereas when they were in the range, they were somewhat equal.
Always buy the strongest currency against the weakest (or weaker) currency.
The constant divergence in the MACD seemed to allude to an upside breakout. But you always want to get a close above the consolidated range before you trade it. Never assume. Get confirmation through the actual price action.
Happy 29th of February....not often we get one of these. Enjoy your "extra day".
Sean Hyman
Editor/Trader
www.money-trader.com
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