EUR/AUD 4 H Chart: Channel Up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The EUR/AUD currency pair has formed a well developed ascending channel pattern on its way up to the 1.4914 resistance line which corresponds to the August 2 high. The currency can be expected to bounce off the lower channel trend-line, just to continue its path northwards. If the pair breaks the aforementioned resistance, it will encounter several intermediate levels, such as the upper Bollinger Band and daily R1 cluster at 1.4920/2, which it will test, and in case of a breakout, a rally towards the upper trend-line along with weekly R1 can be expected. Adding more ground to the expectation of a continued uptrend, technical indicators give out BUY signals on a 4 hour and daily basis, and the SWFX sentiment index shows a majority of traders being short on the currency suggesting it to be oversold. The pair lies just above the crossing of 55-period and 200-period SMAs, signalling traders to buy. Nevertheless, if a downward breakout does take place, the pair will step under the lower trend-line at 1.4825, make a correction at the 20 period SMA and daily S2 cluster at 1.4818 and dip to the weekly PP at 1.4763 with a few intermediate resistances on its way.
© Dukascopy Bank SA
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