Hello traders! Let’s observe the EUR/AUD currency pair on the 3-hour timeframe. It becomes very obvious that price continues to print lower lows and lower highs. Besides, EUR/AUD remains below the 200 Exponential Moving Averages throughout all visible downtrend on this chart.
This suggests the validity of the downtrend at least for the short term. After the most recent rejection of the 200 EMA, the price went down and broke below the uptrend trendline. Pullback followed and we have applied the Fibonacci retracement indicator to that correction up. It shows that there is support located at 1.6069, which is 261.2% Fibs. Another Fibs was applied to the last wave up, occurred back on June 12. The 427.2% Fibs goes in line with the previously mentioned support at 1.6069.
This goes to show, that there still might be a 170 pip potential decline, especially considering the current rejection of the middle trendline of the descending channel. All-in-all, the trend remains extremely bearish as long as EUR/AUD daily closing price will remain below recent high at 1.6280.
Bias: Strongly bearish while below 1.6280
Potential Resistance Zone: 1.6230 – 1.6250
Potential Targets: 1.6070
Have a profitable trading!