Tuesday, 5 July 2011

EUR/USD Daily and Hourly

Daily chart. Yesterday I stated that the daily chart trend has turned up. Today's decline is testing that bullish call, but has not yet invalidated it. Remember that the weekly chart trend is up.

Zooming in to the hourly chart for the past month. The market is testing the top of the trading range from the second half of June. A move above the upper down trend line would be a bullish sign and likely lead to confirmation of an up trend on the daily chart. Until we see such a break higher, we must respect the potential for the market to fall and return to last month's range.

AUD/USD Daily and Hourly

Daily chart. A move over 1.08 would raise the odds of a run up toward the May high, just over 1.10. Until we see a move over 1.08, we should expect the market to move broadly sideways in a range between 1.04 and 1.08.

Zooming in to an hourly candlestick chart of the past month. The action in the trend channel looks corrective, so far. The move to test the lower line followed the Reserve Bank of Australia's statement earlier in the day. A move above the top line, and a move above 1.0750, would be bullish signs, but given the context of the broadly sideways market on the daily chart, a clear break above 1.08 is required to raise the odds for higher levels. Until that happens, the potential for a move lower must be respected.

AUD/EUR Weekly Candlestick Chart

Just curious. Trend is up, which favours the AUD strengthening further against the EURo in coming months.