Forex Trading - EUR/AUD Market Watch 1/19/2011

Here's my forex trading market watch analysis for January 19th 2011. It's a total beginners analysis so don't expect much. However, I will be trying to evaluate today's day trading of the EUR/AUD currency pair on a bit of technical analysis I've researched.

EUR/AUD Technical Analysis

The EUR/AUD is continuing it's formidable recovery from last month's low. While starting today's trading at 1.34081 it is now trading for 1.34431 with a slight drop at the beginning of the day as illustrated by the following chart (taken from MT4 demo):

Now, the two red lines there represent the resistance line (the top red line) and the support line (the bottom red line). And while this 5 minute chart does show a relative drop in price at the start of the day you must notice that the market has already breached the resistance line twice today on its way up.

So, with a bit of hindsight, I want to show you some previous support and resistance lines I've created for the EUR/AUD at the end of December 2010. I decided to draw these lines after viewing the EUR/AUD pair forex trading results, based on a monthly chart view.

Please notice the top red resistance line and the middle red support line. I have decided to place these lines there because of the nine bearish Japanese candles that appear there (representing 9 consecutive days of market fall). The bottom red support line was placed on December 29th when the second significant bullish indicator appeared after the long fall. It was placed at 1.30014 price rate.

To my surprise and to my dismay and disappointment I did not establish a long position of any kind at that time.

Looking today at that third bottom support line I'm left only to dwell on the idea that maybe, by a bizarre fluke of chance, I have discovered the lowest support line for the EUR/AUD in Years. To support my claims I take you back with a monthly chart  of the EUR/AUD from today to the beginning of 2005.

Will today's EUR/AUD continue to climb? Will it climb back to its average trend line of past years from 2005-2008 with a trading average between 1.52590 to 1.72895 or are these speculations a bit over the top?

We can only sit back and learn as we continue to explore the wonderful world of forex trading.