The EUR/AUD finished last week with a Pin Bar Reversal pattern that printed on a weekly Support Zone at 1.2900. The zone has held off the advance of both the Bears and the Bulls in the past 3 months with the Bulls taking about 8 trading days to crack the level and trade higher back in September. This was followed by the Bears attempts to push the pair back down, but the level held for another week as support before the Bulls won and the pair traded up to the 6 month high of 1.28202 on October 5th, before falling back to 1.2900 on Friday. Considering no other factors than price action and previous market behavior at this level, if Friday's high is broken we can expect a rally from the Bulls once again. The most likely targets will be 1.2600 where the Weekly R1 currently resides, followed by a retest of 1.2800. From an intraday point of view, the range is quite tight with the first resistance level being the Daily Pivot at 1.2402 followed by the Weekly Pivot at 1.2427 and the Daily R1 at 1.2450. If Friday's low is broken, it will also be met by support in a tight range with a Daily S1 at 1.2366 and a combined Daily S2/Weekly S1 intersecting at 1.2320 +/- a few pips. Below that, the January 2012 lows at 1.2128 will come into play, before a possible retest of the all time low (according to my data at least) at 1.16007 that was established in July of this year will certainly be a possibility.
Happy Trading