EUR/AUD Daily Chart 2:10PM EDT 7/30/2012
The EUR/AUD has been extending deeper into the abyss (record low territory) since the beginning of July. It held above 1.17 for a correction in a flag pattern, seen in the 4H chart. But once again, the RSI remained below 60, a sign that persistent momentum continues to build to the downside.
As we begin this week, price action has not only broken out of the pattern, but also dug into new record lows below 1.17. When we looked at the weekly chart in our previous EUR/AUD report, we noted a target just above 1.17, and the next key projection level at 1.1560. Here is a recap from that report:
The weekly chart shows some bearish targets coming up.
1) 1.1712 is 61.8% expansion of the previous downswing from 1.4275, 2011 high to the 1.2130, Feb 2012 low.
2) 1.1560 is roughly the range breakout projection, using the range from 2010-2011. ( It’s really anywhere between 1.15 and 1.16 depending if you use the wider width or inner width of the broken range for projection.
3) 1.09 is the aggressive 100% expansion, or swing projection.
We should probably continue to look to the downside, although the weekly chart is starting to show oversold conditions (this does not mean a reversal, but maybe some choppiness ahead that can make the momentum less persistent in the intra-day charts like in the 4H time-frame.)
EUR/AUD Weekly Chart 2:15PM EDT 7/30/2012
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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