EUR/AUD: technical update pre-RBA

The EUR/AUD missed out on making it into my weekend update but here are my charts ahead of tomorrow’s RBA announcement. The EUR/AUD closed the month below the 1.55 level which may prove to be significant; especially as I am not expecting a rate cut at tomorrow’s RBA meeting. However, there are two different bullish technical patterns here making this pair rather interesting.

EUR/AUD monthly: I posted this chart again in my w/e analysis from two weeks ago following a period of some absence. In that analysis I noted the congested zone between 1.55 and 1.75 and how price action looked to be trying to break BACK UP into that region. This attempt was not successful for the October close and so the 1.55 remains on my radar:

EAmonthly

EUR/AUD weekly: the weekly charts shows price trying to consolidate and hold above 1.55 and there even looks to be a recent bullish ‘Double Bottom’ with the neck line at 1.55. Also note that any 61.8% fib retrace here would bring price down to the 1.35 level:

EAweekly

EUR/AUD daily: the daily chart shows this consolidation forming up into a potential Bull Flag and so the trend lines are worth keeping an eye on here too. A 61.8% retrace on this time frame would put price just below a monthly support pivot, the daily 200 EMA and the 1.50 level:

EAdaily

EUR/AUD 4hr: price is hanging on near the 1.55 level and note how this is also near the region of the new monthly pivot and the 4hr 200 EMA:

EA4

The picture on the Ichimoku Cloud chart is a little different.

E/A monthly Cloud: price action is above the monthly Cloud and this could act as decent support for this pair:

EAmonthlyCloud

E/A weekly Cloud: price is above the weekly Cloud too which is bullish:

EAweeklyCloud

E/A daily Cloud: price is below the daily Cloud which is short-term bearish however:

EAdailyCloud

E/A 4hr Cloud: price is in the 4hr Cloud which suggests no dominant trend and is neutral.

EA4hrCloud

Summary: There are currently two bullish patterns on the EUR/AUD although it is trading below a significant S/R zone at 1.55:

  1. The first bullish pattern is that of a Bull Flag with the pair possibly consolidating before bullish continuation. The 1.55 level, above price action, is a decent S/R zone though and is keeping a lid on price for the time being.
  2. This 1.55 level could also be the bullish breakout zone for the neck line of a second bullish pattern though, that of a ‘Double Bottom‘ on the weekly chart.

It is also worth remembering that the EUR/AUD is trading above the weekly and monthly Ichimoku Cloud which is further bullish support. However, the RBA meet tomorrow to announce interest rates and any rate-hold decision could put bearish pressure on this pair. The levels to watch on this pair include:

  • the daily chart’s Bull Flag trend lines and
  • the 1.55: long term S/R and also a possible neck line level for a recent ‘Double Bottom’.

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