Tightening stop loss on EUR/AUD trade

I have tightened my potential stop loss on the long EUR/AUD call to 1.4865, just under the April 24 low.

On the hourly chart there is clear triple divergence suggesting short-term downside, while the stochastic indicator on the daily chart is getting to the top end of the range. Pullbacks look like buying opportunities however given the recent trend.

Perhaps the key rationale for tightening my stop is because of the massive event risk this week with CPI estimates in play this Wednesday; while the consensus is calling for a thirty basis point rise to 0.8%, a weak number here could see the EUR sold off sharply. I wouldn’t be surprised to see EUR find buyers on an in-line print, while an above estimate print should see the market re-price easing expectations from the ECB.

IG Charts

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.