EUR/AUD Daily Chart 2:40PM EDT 10/12/2012
Support holding: The EUR/AUD has been bearish this week, until it tested the rising trendline seen in the daily chart, which goes back to the 1.1605 low in the beginning of August. This trendline support was also coincident with a previous support/resistance pivot around 1.2565.
Resistance: With the market still holding a bullish bias, there is more room to the upside until some resistance factors to consider above the 1.2915 resistance. The previous consolidation resistance area is actually between 1.2915 and 1.3025. Plus, as price approaches the 1.30 psychological handle, it will also be testing a declining trendline going back to August 2011. Therefore, around 1.30, we should look out for at least a brief bearish outlook, or at least reduce any bullish outlook until a clear break above that aforementioned falling trendline.
Momentum: The momentum in the daily chart is showing bullish bias, but the 4H chart shows some nascent bearish momentum. However this bearish momentum in the 4H chart will be lost if the RSI pushes above 60. And a clear break above 1.27 and the 61.8% retracement level of the latest downswing opens up more likelihood of a bullish continuation.
However if this price is stuck under 1.27 and pushes back below 1.25, we are likely going to see more bearish momentum and will have to hold off on the bullish outlook to make way for at least a sideways market if not bearish.
EUR/AUD Daily Chart 2:45PM EDT 10/12/2012
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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