One of the advantages of using technical analysis is that indicators and interpretations are not limited to any specific assets or product classes. Traders may utilize any of their trusted indicators on different assets and signals could be generated accordingly. This is particularly beneficial when popular assets failed to yield a clear trend or any trading signals.
For instance, the popular EUR/USD has been trading side way for some time which increases the difficulty in spotting a trading opportunity. Nonetheless, with the assistance of technical analysis, a possible trend following opportunity may be present in the cross currency EUR/AUD.
On a daily chart, an uptrend could be forming on higher high and higher low. A strong up candle poked through the key level at $1.5900 and is now at the inflection point at $1.6000. In addition, MACD is showing a ramp-up of buying momentum. A sustainable breach of $1.6000 may see an uptrend towards $1.6150, next targets to watch could be at $1.6250 then $1.6350.
A possible trade set up could be an entry after a pullback below $1.6000, and potentially a stop at $1.5900. Profit to loss ratio could be 1.5 : 1, 2.5 : 1, and 3.5 : 1.