- \n
- EUR\/AUD fails to make a lower low;<\/li>\n
- Pair enters a triangle chart pattern;<\/li>\n
- Sentiment bias is slightly bullish ahead of news.<\/li>\n<\/ul>\n
EUR\/AUD is increasingly developing a bullish technical sentiment, yet confirmation is still required. The current downtrend failed to provide a lower swing low, as price rose above the bearish trendline from March and is now within reach of the main resistance area. If European data does not disappoint too much, a rally above 1.4850 will confirm the reversal of the current trend.<\/i><\/p>\n
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Trend reversal scenario<\/b><\/p>\n
![\"EURAUD](\"http:\/\/capitaltrustmarkets.com\/wp-content\/uploads\/2014\/04\/EURAUD-4h-16th-April.png\")
<\/p>\nLast week EUR\/AUD offered a perfect rejection from 1.4850 \u2013 based off the 200-Day Moving Average and the trendline from March \u2013 making a higher low in the process. The rejection itself was signaled by a Bearish Engulfing Bar on the 4H chart (and a small bearish Pin bar on the Daily timeframe). Even with such a nice display from the sellers, the pair failed to beat the weekly low at 1.4653.<\/p>\n
In a strong bearish trend, as it is the case right now, any failure to continue making lower swing lows is immediately perceived as a sign of weakness. Buyers are currently seeking to test the resistance between 1.4822 (triangle trendline, 200-Day Moving Average) and 1.4850 (previous high, 100 Simple Moving Average on 4H chart).<\/p>\n
A break-out and close above 1.4850 will signal the trend is now bullish, opening the way higher. Main resistance levels:<\/p>\n
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- 1.4955 \u2013 resistance from late March, beginning of April.<\/li>\n
- 1.4990 \u2013 38.2% Fibonacci Retracement from 1.5536 down to 1.4653<\/li>\n
- 1.5100 \u2013 February 2013 Low and strong Fibonacci Confluence<\/li>\n<\/ol>\n
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Without corrections, trend continuation is limited<\/strong><\/p>\n
If EUR\/AUD fails to breach the resistance, the triangle chart pattern remains valid and prices will continue to adopt a range personality. A bearish break of the triangle is a viable trading opportunity as well, yet the lack of correction in the trend thus far and oversold conditions could limit further drops to 1.4530 area.<\/p>\n
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\nPrepared by Alexandru Z., Chief Currency Strategist at <\/i>Capital Trust Markets<\/i><\/a><\/p>\n<\/p>\n
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Technical Sentiment:\u00a0Bullish Key Takeaways EUR\/AUD fails to make a lower low; Pair enters a triangle chart pattern; Sentiment bias is slightly bullish ahead of news. EUR\/AUD is increasingly developing a bullish technical sentiment, yet confirmation is still required. The current downtrend failed to provide a lower swing low, as price rose above the bearish trendline … <\/p>\n