Trade of the Day: EUR/AUD

By: Dima Chernovolov

EUR/AUD continues to fall inside the 4-hour Falling Wedge chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Falling Wedge at the 5-bar level – which is the result of the below-average Initial Trend (4 bars), lower Uniformity (3 bars) and significant Clarity (8 bars). EUR/AUD is expected to fall further inside this chart pattern – in line with the earlier breakout of the support area shown below.

As can be seen from the daily EUR/AUD chart below, the price earlier broke through the support area lying between the key support level 1.6425 (former strong resistance from June) and 38.2% Fibonacci correction of the previous sharp upward impulse from July. This price area is acting as strong resistance zone after it was broken.  The proximity of this resistance area increases the probability EUR/AUD will continue to fall inside this chart pattern.