EUR/CAD 1D Chart: Symmetrical Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The symmetrical triangle formation that the EUR/AUD has developed over the last two and a half months has been the consequence of an upward breakout from the half-year triangle. The currency pair failed to follow a traditional scenario, where it would be expected to rally towards the 200-period SMA after a rebound from the significant top trend-line of the broken triangle – and this is an argument against a rally north. However, it is hard to tell, whether the rate will surge or take a plunge. In case of a downward breakout, the pair will dip towards the senior triangle upper line at 1.4405 and can be expected to maintain it as a trend-line on its way south. If an upward breakout takes place, however, the pair should finally succeed in its attempts to reach the 200-period SMA after encountering intermediate hitches around 1.4648. Aggregate technical indicators fall in favour of an uptrend over the short-term, but signal SELL when it comes to weekly and longer term estimates.
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