© Dukascopy Bank SA
The pattern started on the 2nd of October, 2012, when the pair surged from 1.2373; currently it is changing hands at 1.2280; with the trading range around 600 pips. Trading volume seems to decline in the length of the pattern. Current market sentiment is strongly bullish (72%), adding to signs that the pair may reach the resistance line and maybe even penetrate the upper trend line. Long traders could focus on the Fibonacci retracement and Daily pivot (R1) at 1.2296/30, Weekly pivot (R1) and Bollinger band at the level of 1.2351. Another stop is at the level of 1.2520, where Bollinger band, Fibonacci retracement and Weekly pivot (R3) are standing. Pattern's resistance can be found at 1.2642.
The Australian Dollar is sold in 74% of all cases, while technical indicators are sending "sell" signals on the 1D and 1M chart, suggesting a retest of the support line. Short traders could focus on the level of 1.2182, where Fibonacci retracement and Weekly pivot (S1) can be found. The second support level is at 1.2165– Bollinger band and Daily pivot (S3). Moreover, short traders should focus on the Weekly and Monthly pivot point (S2) at 1.2105. Pattern's support stands at 1.2042.
Main fundamental events which could have significant impact on the pairs development in the near future are Monetary Policy Meeting Minutes in Australia on Tuesday and New Zealand's inflation rate on Wednesday.
© Dukascopy Bank SA