Daily Forex Update: EUR/AUD
By: Dima Chernovolov
EUR/AUD continues to fall inside the clear Down Channel chart pattern which was previously identified by Autochartist on the 30-minute charts. Autochartist rates the quality of this Down Channel at the 5-bar level – which is the result of the slow Initial Trend (2 bars), average Uniformity (5 bars) and near-maximum Clarity (9 bars). EUR/AUD is expected to fall further inside this Down Channel – in line with the earlier downward reversal from the powerful resistance area shown below.
As can be seen from the weekly EUR/AUD chart below, this Down Channel is following the earlier sharp downward reversal from the powerful resistance area lying between the major resistance level 1.5220 (which also reversed the price in May) and the upper weekly Bollinger Band. The downward reversal from this resistance area created the weekly Japanese candlesticks reversal pattern Shooting Star. The proximity of this resistance zone and the clear bearish divergence on the weekly Stochastic increase the probability EUR/AUD chart will continue to fall inside this Down Channel.
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