EURAUD - Bullish Move With AB=CD Target Of 1.80 zone

FX_IDC:EURAUD   Euro / Australian Dollar
Many are suggesting that this pair could drop even further and make new lower low and have cited potential bearish H&S pattern and prior strong bearish move to support the idea of continuation of the bearish trend .

However I do not feel that this is likely for the following reasons:

1. Having dropped from 2008 high to 2012 low is now in recovery or retracement mode. It appears to have completed first leg of the recovery which is in 5 minor waves suggesting an impulse leg.
2. This impulse leg was retraced to 50% of it's move of the low and which is in the form of ABC zigzag suggesting only correction and not new bearish move to downside.
3. 200 period MA appears to be now started to move up and appears to be acting as good support.
4. This is further supported by the fact that both the RSI and MACD divergence developed over a longer periods during it's major drop are also suggesting continuation of recovery.
5. Last weeks candle is decent size and is appearing to follow through on previous weeks potential bullish harami.

Therefore, if the above holds true then we could expect a 50% -61.8% retracement of its drop from 2008 -2012 and that is also in the vicinity of the AB=CD move of the low. One worth watching and taking note.

As always, do your own analysis for your trade requirement.

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Thank you for taking the time to read my analysis.

Just to mention that I have assumed that the wave c is truncated wave. For this the last low at 1.3750 zone must hold. If that is taken out then what I am saying is wave C might just be wave 1 of C and will have strong decline may be towards 1.30 area.
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