EUR/AUD Testing Key Resistance
Fan Yang | Sep 21, 2014 10:10PM ET
EUR/AUD has been bearish since late January, when it made the high on the year at 1.5831. Since then, the pair has been making lower highs and lower lows, finding support at 1.3788 in early September.
Then, we saw a V-shape reversal rally that is now breaking the falling trendline. However, we can see the breakout as tentative and would better descrive EUR/AUD as consolidating aroudn the trendline. There is still the 100-day simple moving average, and the 1.4478 high. Until price breaks above 1.4480, we still have lower highs and lower lows. Also, the daily RSI is right around 60. If the RSI fails to clear above 60, the bearish momentum is still maintained.
While there are still signs that the bearish trend is not over, the v-shape reversal does threaten to break these signs in this upcoming week.
EUR/AUD Daily Chart 9/22
If price does break the aforementioned resistance factors, we should limit the bullish outlook to 1.48, where the 200-day SMA resides.
The 4H chart shows a bullish trend in September that has a strong "impulse" structure. This suggests the beginning of an uptrend or a major consolidation/bullish correction. Now, if price falls below 1.43, we can expect some bearish attempt. But if price can hold above 1.40, we still have more consolidation/bullish correction. Otherwise, below 1.40, it will be even more unclear, but we should probably have bearish bias toward 1.3850.
Now, if price can climb back above 1.43, we should look for that bullish correction scenario, again with the maximum bullish outlook to 1.48.
In any case, other than a near-term bearish oultook for a break below 1.43, we will have to wait for some more clues. We do have to shift the market from bearish to neutral-bearish.
EUR/AUD 4H Chart 9/22
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.