EUR/USD: Close Above 1.1250 Key; AUD/USD: Next Target - SocGen

After testing a multi month descending trend at 1.08 earlier this month, EUR/USD has embarked on a recovery and is now breaking above 1.1250 which happens to be the 76.4% retracement from last month highs, notes SocGen. 

"More importantly it is the upper limit of a weekly descending channel. Weekly MACD is probing the equilibrium level and also a down sloping resistance line which suggests further rebound can’t be ruled out.

A definite close above 1.1250 will indicate possibility of retesting upper limit of the broad consolidation zone at 1.1460, also the upper part of the daily channel.

This will decide about a larger recovery. 1.1150 will be an immediate support while graphical levels at 1.1080/60 should cushion short term down move, SocGen argues.

Turning to AUD/USD, SocGen notes that it has shown early signs of stabilization after it formed a double bottom at key support levels of 0.6750.

The pair is now breaking above our advocated level of 0.7550/0.75 which happens to be the lower limit of monthly channel.

A sustained move above this will mean further recovery towards graphical levels of 0.80 with intermittent targets at 0.7655 and 0.7830, projection for the up move," SocGen projects. 

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