The EURAUD has formed a Bearish Engulfing Bar (BEEB) on the daily price action chart. This BEEB is rejecting the recent resistance, however it is not up and at a swing high like we would like and it is not sticking out and away from all other price like the best engulfing bars should do. Because of these reasons this is not the best quality engulfing bar.
The resistance level that the engulfing bar is rejecting has proven to be a key level for this market. As the chart below shows, this level has held as both a previous support and resistance level.
If price can break the low of this engulfing bar there is a very close near term support level below that comes in around the big round number of 1.4200. If price fails and moves higher it is going to have to break through this key resistance that the BEEB is rejecting if it wants to make any sustained moves higher.
This chart has been a gold mine in recent times for price action traders who trade the daily charts. As the chart below shows a lot of engulfing bars and a pin bar have been fired off with quality results.
EURAUD Daily Chart
I had my resistance line at 1.4500 and it forming a nice BEEB today.