The EURAUD bounced from an 18 year support line last month and made a key reversal month. Additionally, the area that the pair is bouncing from has historically held as support. The August 1991 low was at 1.5371, the February 1994 low was at 1.5529, the May 2000 low was at 1.5001 (low of long term range), the April 2004 low was at 1.5685, and the June 2005 low was at 1.5529. Last month’s low was at 1.5474. In summary, the EURAUD is at the low of its 30 year range.
A flat correction either ended at 1.5917 or a triangle is unfolding from the 7/30 high of 1.6154. Both patterns are bullish in the near term and we expect at least one more leg higher. A break above 1.6164 exposes the 61.8% of 1.7033-1.5473 at 1.6437. This is also a former congestion area.
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