EURAUD Analysis December 2014 (D)

The EURAUD has not played out as expected and while no major resistance has been broken I suspect it will be shortly. Let’s take a look at the daily chart.


We can see price has been bouncing off the support and resistance levels. This has been a bonanza for range traders. The limits of this range were set in October with a high at 1.4705 and a low at 1.4222. 
This indecision by price is evidenced by the Bollinger Bands which show price toing and froing between the upper and lower bands. 
The Stochastic and Moving Average Convergence Divergence (MACD) indicators are both showing a bullish bias. Both indicators are also showing a pattern of higher highs and higher lows which is more evidence that price may go a bit higher.
Something of interest on this chart is the existence of a double top against the trend as it is above the previous swing high and triple bottom against the trend as it is below the previous swing low. Both formations are not common trend ending patterns and hence should be busted at some stage.
In this situation I suspect whichever pattern is busted first will be the fake out move. Considering I expect price to eventually trade down to a minimum price of 1.27 I favour the double top being busted first. Then, once a top is in place, price can reverse back down and bust the triple bottom.
I expect price to make up its mind shortly on which direction will be next. I suspect an ABC correction may be playing out with wave A and B already in place. That would likely see wave C bust above the resistance level. 
And once we have the next high in place then perhaps we will finally witness the big move south that I am expecting. 


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