EUR/AUD: Increasingly Bullish Momentum
Matt Simpson | Nov 29, 2013 01:37AM ET
Yesterday I had expected the 1.5 level to hold slightly longer as resistance than it actually did. In fact we hardly saw any form of retracement at all before breaking through the level today. So where's the next target?
EUR/AUD WEEKLY:
Since the low of June 2012 the EUR/AUD has seen nothing but increased momentum and did not even flinch as it hurtled up through the 200 wk eMA. The 1.50 level has been an interesting one though - the last time we visited this level since the bearish decline from the 2008 highs was in fact the beginning of a 14 week falling wedge. One of the first clues that we were about to break to the upside of this wedge was covered in our Analysis webinar which pointed out the Bullish Hammer which rejected the 1.4050 support level. This turned out ot be a good call as we have seen 3 consecutive weeks of buying and the most bullish month since June this year.
Should we break convincingly above 1.50 then the next pivotal S/R level (which I tend to find quite reliable) is not until 1.5530. However a more conservative target could be the 38.2% retracement between 2008 highs and 2012 lows around 1.5250.
EUR/AUD DALY:
Today we tested and marginally broke through the 1.50 target (which was generated as the base of the falling wedge). How price reacts here could provide clues going into next week. At the time of writing we have dipped back below the level so do not rule out the potential for a reversal candle to form beneath this level, which could entice further selling back into the rising channel. However there are clear levels of support to look for buying opportunities to get back in line with the dominant, and plainly bullish trend.
SUMMARY:
- Bias is for retracement back inside channel and to seek further buying opportunities
- Next primary target is 1.5250
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