If you think stocks are going to bounce, look at the EURAUD!

The EURAUD is trying to develop a head and shoulder pattern with key support (neckline) at the 1.5900 level. If you think stocks are “oversold” then you may want to look at the EURAUD and a possible downside move towards the 200dma or lower. Personally, I am torn on the idea, but having an opportunity of buying AUD and selling EUR on a bounce higher in equities makes a lot of sense near term. The flipside to this is that the EURAUD 50dma crossed over the 200dma giving the pair a “golden cross” back in July and bears should respect that development.

Steve Voulgaridis