The EURAUD has continued it’s climb today. After the price corrected toward the 38.2% of the move higher in early Asian trade (at 1.17402 – low reached 1.1737) and held, the buyers emerged and started the next trend leg higher. That move has slowed over the last few hours, as the price approached key resistance against the high from the end of July (see daily chart below). That level comes in at the 1.1855 level. The high today has so far reached 1.18478. A move above this level is needed to solicit further buying interest.
Looking at the 5 minute chart, the 100 bar MA comes in currently at the 1.1825. This is the first support target on the downside currently. A move below that level could see the price rotate down toward the 38.2% of the move up today at 1.1805. I would expect buyers on the 1st test. A break would target the 1.17923 are (50% and high from August 15th – see hourly chart).
The breaking of the trend line this week in this pair has led to largest corrective move in the EURAUD since the trend down began in the middle of May (240 pips from the low on August 9th). That trend move down totaled over 1400 pips. With only a 240 pip correction currently, there is room for a further move higher. However, the month long resistance high at 1.1855 needs to be breached. Watch that level.