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EURAUD is testing a critical level as new support today.
I wrote about the potential for a breakout above 1.6570 on October 16th.
I was looking for a daily close above that level to confirm the breakout and get long.
As I mentioned to DPA members earlier in the week, I managed to get long with an average just higher than 1.6570.
However, I also told members that I got out of my long position on Tuesday for a gain of 217 pips.
My gut told me we were likely to get a pullback into 1.6570 as new support.
Sure enough, EURAUD is testing that level as I write this.
The question now is, will 1.6570 hold as support, or was this latest breakout a false move?
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Our answer should come over the next few days and will depend entirely on where EURAUD closes each day.
As long as 1.6570 holds on a daily closing basis, I like EURAUD higher toward 1.7000.
On the other hand, if the pair closes back below 1.6570, it would indicate that the latest move was false.
It would also expose lower levels.
If you’re on the fence about what to do here, it may be best to wait for this week’s close in a few hours.
The weekly close for EURAUD in relation to 1.6570 should tell us where the market is likely to go next week.