I’m not going to stuff my technical analysis down your throat and everyone should look at it with their own rose-tinted glasses, but I’m of the view that this pair will soon accelerate higher.
- Market is still structurally short of EUR and has been adding to these positions in recent days
- Market is still quite long AUD, especially some of big long-term real money and macro fund players
- Economic news out of China has been quite poor
- Technicals for me show an inexact basing pattern forming near historic lows
I think we will soon see an explosive short-covering rally back towards a previous congestion level near 1.3100 at least, and a clean break above 1.3225 would see the rally extend towards 1.3600. Timing is everything in this pair but as we’ve seen many times in the past, the rallies when they happen are explosive in nature.
