Aussie Retreats, While the Euro Forms A Top

[ForexChaser.com] The market took a turn during the Asian and the European sessions, with the Eur/Usd appearing to form a top and with the Aud/Usd plunging 100 pips in just a few minutes.

However, Forexchaser.com team considers that these moves are just standard retracements, rather than a full-blown swing point. The last three weeks had been very strong for the Aud/Usd, with the pair gaining as much as 750 pips to reach the highest value over the last two months. The sell-off seen overnight could have been expected to some extent, due to the market’s preference to move in wave structures.

At this point in time, the Aud/Usd is trading in the vicinity of the 200-day SMA, and just a few pips above the support trendline that has been holding the market since July 06 2010. For some aggressive traders, this might be a very good place to buy the Aussie. More conservative traders should wait for the 0.8800 area, close to the 38.2% retracement and near the 0.8700-0.8850 congestion band.

For the Eur/Usd, Forexchaser.com team recommends traders to be more cautious. Thinks are still messy in Europe (or at least the market thinks they are). A failure to close above the 1.3000 area on Wednesday could bring some more Euro bears into the market, forcing it to retrace parts its recent gains. Forexchaser.com team has a neutral outlook for the Eur/Usd at this point in time, and will avoid issuing any trading signals until the pair’s price action provide further clarifications.