Check out this symmetrical triangle formation on the hourly chart of EUR/AUD!
Is the pair in for a breakout soon?
Or will it stay in consolidation until the end of this month AND quarter?
EUR/AUD 1-hour Forex Chart by TradingView
The Aussie has been tossing and turning for the past few weeks, driven by mixed economic data and ever-shifting market sentiment.
This kept EUR/AUD in consolidation, forming higher lows and lower highs inside a symmetrical triangle pattern. Price just retreated from the top of the triangle and might be in for another test of support around the 1.6550 minor psychological mark.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and Australian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Moving averages are oscillating to reflect rangebound conditions, barely offering strong directional clues at the moment. Still, it’s helpful to note that price is dipping below the pivot point level (1.6580) and the technical indicators, so these could hold as near-term dynamic resistance.
Meanwhile, Stochastic is starting to bottom out without even reaching the oversold region, hinting that buyers might be eager to return. In that case, watch out for another test of the triangle top close to the 1.6600 major psychological resistance.
Sustained upside momentum might even spur a break higher and a rally that’s the same height as the formation, possibly taking it up to the bullish targets at R1 (1.6690) then R2 (1.6790).
Similarly, a breakdown from the triangle support could allow sellers to set their sights on the downside targets at S1 (1.6490) then S2 (1.6380).
Good luck and good trading this one!