Trading focus this week is on the EURUSD and EURAUD, specifically on identifying the end of corrective weakness (buying dips).
Eventual EURUSD targets extend to 13800-13900 and 14400 and risk (for longs) is the 1/10 low at 13038. Former resistance at 13270-13308 is now estimated support. In Friday’s DailyFX PLUS video, I mentioned the 5 day average as a trigger point. The 5 day average is only at 13220 today but that level will increase quickly with each passing day.
If 2013 is the ‘year of the breakout’, then the EURAUD is probably next in line. A late December break above the inverse head and shoulders neckline proved false and price is back testing the line again today. Near term support has been reached at 12626 (intraday Friday pivot). The decline from last night’s high is probably the first wave of a 3 wave corrective drop. 12530/70 would be an ideal level to look for a low if reached. I’ll be closely following the near term pattern and updating via Twitter @JamieSaettele.
What many really care about I’m sure if the EURJPY. Those that wish to fight this (and I’m looking to do just that) may wish to do so on strength into 11967 with a stop above last night’s high and a 11760 target.
--- Written by Jamie Saettele, CMT, Senior Technical Strategist for DailyFX.com
To contact Jamie e-mail email@example.com. Follow me on Twitter for real time updates @JamieSaettele
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Jamie is the author of Sentiment in the Forex Market.