Is the EUR/AUD duo losing steam after its climb?
EUR/AUD tried a couple of times to push past the 1.7400 level but failed, and now it’s edging closer to the neckline support at around 1.7100.
There’s chatter about a potential reversal pattern developing on the 4-hour chart. Don’t let this opportunity slip away.
EUR/AUD 4-hour Forex Chart by TradingView
Earlier in March, EUR/AUD was riding high, buoyed by dovish anticipations from the Reserve Bank of Australia (RBA) and concerns over tariffs. However, that upward momentum might be fading.
The pair hit a snag with extending beyond the substantial 1.7400 mark, especially after the Australian central bank adopted a neutral tone. They’ve decided to hold rates steady for now.
On the European side, the European Central Bank (ECB) shows a readiness to lower rates, but they’re proceeding cautiously, making decisions based on incoming data.
Are we on the verge of consolidation, or is a trend reversal imminent?
Important Tip: The ebb and flow of market prices often stem from fundamental factors. If you haven’t brushed up on the euro and the Australian dollar, now’s a good time to delve into the economic calendar and stay up-to-date with the latest fundamental news!
For a downtrend to be confirmed, prices need to test and break below the neckline at 1.7100, marking a notable psychological threshold, potentially leading to a dip of around 300 pips, mirroring the height of the chart’s formation.
Be alert for any reversal candlesticks within this support area; they could signal prolonged sideways movement for EUR/AUD. In this scenario, watch for a possible rebound to recent highs or towards the pivot point and 1.7200 level.
And don’t overlook the fact that the 100 SMA is comfortably above the 200 SMA on this chart. This suggests that the support level might prove resilient rather than yielding.
Whichever trading strategy you choose, remember to implement sound risk management practices and keep an eye on key events that might impact market sentiment!
