Watching close resistance against 1.42098-35
The EURAUD found seller against the 200 and 100 day MA yesterday and again today (as per my weekend post CLICK HERE). Of course there was a little thing like the RBA decision that got in the way. That decision to keep rates unchanged, sent the pair sharply lower. (PS I was disappointed to see the release seemed to have been leaked. There was a sharp move lower before the scheduled time. What a shame....)
In the process of the unravel to the downside, the price of the EURAUD moved back below the 1.4209-1.4235 area (see yellow area in the chart above). This area created a floor from September through November on the daily chart. Back in July 2014, was when it all started. In between those dates, there was a plunge below, and a quick rebound back higher (see red areas in the chart above).
In 2015, there have been two other looks below this area. The last of which came during most of March. That move found it's way back above in April - until today. The price is currently back below that "line in the sand". The question from a technical perspective is "Can the price now stay below that area and keep the bears in control?". If it can, the recent price history says there is room to roam. If if the price can't stay below this area, we could see a snap back rally.
Looking at the 5 minute chart, since breaking below the 1.4235 level soon after the decision, there was only a brief 35 minute period where the price traded back above the 1.4235 level.
In the last correction higher (started in the last London morning session and into the NY morning), the price squeezed above the 1.42098 level , but only by about 10 pips.
The price is currently back down testing the low from earlier today, and the 100 bar MA on the 5- minute chart (blue line in the chart below). A break below should give the sellers more confidence, and at the same time worry any dip buyers. Holding and there may be a shift back to the buyers.
Key technical test for the pair.
