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Technical Report: March 7, 2013 Australian Dollar Overcomes Fib Resistance

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Chart of the Day:  AUD/USD

AUD/USD: The Australian Dollar was one of the big movers overnight and prices have now convincingly removed important Fib resistance levels at 1.0220. This area is the 61.8% Fib retracement of the decline from 1.0290 and this latest break now suggests a full retracement of that move. 1.0220 can now be viewed as key short term support, as this is also where the 100 and 200 period moving average cluster is found on the 30-min charts. Indicator readings are also supportive of this bullish bias, as the MACD is flattening out in positive territory with plenty of room to extend higher.

EUR/CHF: The EUR/CHF continues in its upward staircase fashion and has most recently found support in the 1.2240 region before bouncing to new short term highs at 1.2290 double top. This area is important resistance as it also marks the 38.2% Fib retracement of the move from this year’s highs at 1.2560. A break here to the upside will likely have a good deal of follow through in the short term based on stop loss momentum. For historical levels, the next major resistance area comes in at 1.2320.

EUR/JPY: The EUR/JPY is starting to form an ascending triangle, after falling to yearly lows at 118.80. 122.10 is the important level to the upside, and if we do see a break here, the bias turns toward an expected test of 127.70. 122.10 is also where the 100 period EMA comes in on the 4H chart, so if we do see a break here, it is an indication of improved momentum.

GBP/USD: The GBP/USD is attempting to bounce after falling to new yearly lows below the 1.50 psychological barrier. The resulting rally has now created a triple top at 1.52, so we will need to see an upside break here in order to settle on a contrarian bullish bias. Indicator readings are still in negative territory, so the evidence short term favors selling positions. To the downside, a bearish break (and daily close) below 1.50 would be highly significant, as it suggests an eventual test of the lows at 1.42 before any meaningful bounces can be expected.

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