Reverse alert!
If this correction level continues in the EUR/AUD, the pair may complete a long-term reversal chart pattern.
This is what I see in the 4 hour timeframe.
Forex EUR/AUD for 4 hours Planned by TV
The EUR/AUD is in the middle of a correction to an area of interest that has been holding since last month.
This is near the 50% to 61.8% Fibonacci retracement levels and 1.6400 key psychological sign and dynamic inflection points at the moving averages.
Talk about a confluence!
If the previous resistance-turned-support acts as a ceiling again, the price may resume its decline to this month’s lows and form a head and shoulders pattern.
The 100 SMA is still above the 200 SMA for now, so there could be room for a continuation of the decline. Then again, the gap between the indicators is narrowing to indicate a possible bearish cross.
Meanwhile, Stochastic is heading north but is approaching overbought territory to reflect exhaustion among buyers soon.
Better keep your eyes peeled for another lower wave once the oscillator turns south, but also look for a move beyond 61.8% Fibonacci. The last scenario may mean that the euro bulls refuse to back down!