Technical Sentiment: Bullish
Key Takeaways
- EUR/AUD invalidated the triangle chart pattern boundaries;
- The pair is in a bullish trend configuration, with a higher low already in place and a higher swing high in the making;
EUR/AUD has slowly but surely developed a bullish technical sentiment. On Wednesday the pair tested the resistance trendline for the third time, retraced to 61.8% Fibonacci level, creating a higher low in the process. EUR/AUD has been steadily rising since then, invalidating the triangle, thus confirming the overall intentions to move even higher, towards 1.4955-1.4990.
Bullish Trend Scenario
The resistance trendline at 1.4817, which marked the triangle chart pattern, was also backed up by the 200-Day Moving Average and the 100 Simple Moving Average on the 4H timeframe. By breaking above this area, EUR/AUD cleaned out a few stop losses held by traders who were shorting the pair while it was still priced within the range.
Wednesday’s correction to 1.4716, 61.8% Fibonacci Retracement between 1.4661 and 1.4818, is now the most recent higher low. While this support level remains intact EUR/AUD will continue to be bullish, even price dips below 1.4800 again.
The current swing should target 1.4850 and above. A higher high above 1.4850 suggests the pair will be marching towards 1.4955-1.4990 next week.
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Prepared by Alexandru Z., Chief Currency Strategist at Capital Trust Markets
