AUDUSD- On Friday we noted that the aussie was "now moving into a critical resistance zone with trendline resistance dating back to the February highs coming into focus around 1.0455/60. While our longer-term outlook remains weighted to the downside below 1.0480, it's important to note that a near-term topside break here risks advances into the R1 monthly pivot at 1.0475 (High was 1.0472) and the 100% Extension taken off the October advance at 1.05. As such we adopt a neutral stance here into the close of the week- Look for the Sunday open offer further conviction on a directional bias with my initial thoughts to sell near-term rallies into 1.0480."
It seems more likely that we'll get that test of 1.0480 with a break here risking the 100% extension at 1.05. Above this mark we look for a resistance in the region between the 161.8% extension off the monthly low and the R2 monthly pivot at 1.0550-1.0575. Only close back below 1.04 puts the bears back on track. Headlines out of Europe are likely to take central focus amid a light economic docket at the start of the week with US data picking back up tomorrow.
EURUSD- Unchanged from Friday, "The breach above 1.2840 (38.2% retracement off the October Decline) was technically significant and warranted action in my opinion. The advance took the pair into a key resistance region tweeted this morning between the 61.8% retracement and the monthly pivot at 1.2955/65. Note that daily RSI is now testing the 60-threshold with a reaction here likely early next week. As such we will maintain a neutral stance on this scalp setup as well pending Sunday's opening range. " The open provided little so we are still on the sidelines.
I'll update my StockTwits chart stream with any updates to these levels.
---Written by Michael Boutros, Currency Strategist with DailyFX.com
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- critical resistance