EURAUD Point 4 High (D)
Created on Monday, 24 August 2015 22:22
Written by Austin Galt
We have been tracking a 5 point broadening low formation in the EURAUD and I now believe the point 4 high to now be in place at 1.6589. Let’s quickly take a look using the daily chart.
EURAUD DAILY CHART
We can see the wild trading which saw a massive range of 10c for the day. It’s not often we witness action of that sort.
The move up over the last week shows the price rise to be parabolic in nature which is often found at the end of bull trends.
Previous analysis showed the expectation this point 4 high would be below the 2014 high while in fact it was above. That’s ok. I believe this to be bullish for the longer term prospects of this pair.
The Bollinger Bands show price traded well above the upper band which is commonly found at tops.
The RSI is well overbought so a correction would look in place here. This RSI reading showed a new high which is bullish in that after a correction a rise to new price highs would likely start to set up some bearish divergences.
The Stochastic and MACD indicators both show their averages diverging which is often seen just before a correction.
Summing up, I believe we have a temporary high here which may well turn out to be the point 4 high in the 5 point broadening low we have been following.
Also, we will look at the longer term charts in the coming newsletter.