The EURAUD has been in a steady down trend since mid May (see daily chart above). The decline has stayed in a channel for most of the way. This week the price broke above the topside trend line and it prompted a move up to 1.1789 yesterday. This took the price above the high from earlier in the month at the 1.1775. However, when the move higher reversed yesterday, it led to a pretty quick rotation back down (see hourly chart below).
Today, the price is rebounding again with the EUR’s strength and AUD apathy. Looking at the hourly chart below, the price is back above the 100 and 200 hour MA at 1.1704-08 levels (note the price tested and held against the 61.8% of the move up from the August 9 low yesterday). The price is moving back toward the 1.1775 high from August 6th. That is the next target along with the high from yesterday at 1.17915. A move above opens the door for further momentum higher (there is room to roam if traders start believing the trade).
On the downside, the 1.17208 was the 38.2% of the move up from the low this week (see chart below). This level stalled ont the way down yesterday, was broken and provided initial resistance on the first corrective move higher today. When that level was broken in the last hour or so of trading, momentum buying ensued. Traders are using this level as a technical level to follow. As a result, look for traders to use this level as support/stop today. Stay above and all is well with the pair. Move below and the chart looks more like a consolidation.
