EUR/AUD appears to be showing signs of a potential new up leg after hitting a bottom earlier this month. Various reversal patterns and signals are pointing towards a likely extension higher for the currency pair. The recent recovery saw EUR/AUD rising from 1.6000 to the 1.6300s before pulling back to its current consolidation levels in the 1.62s.
The daily chart for EUR/AUD suggests that this could be the beginning of a new leg higher within a long-term range that ranges from about 1.6000 to the 1.65s. If this is the case, prices are likely to continue moving higher. A break above Tuesday’s high of 1.6354 could indicate a continuation towards the 50-day Simple Moving Average at 1.6433, with potential further upside towards the top of the range around 1.6550.
The Moving Average Convergence Divergence (MACD) momentum indicator has crossed above its signal line, giving a buy signal and further supporting the bullish case for EUR/AUD. Additionally, a bullish Three White Soldiers Japanese candlestick pattern was formed after the October 3 bottom, suggesting a possible reversal of the short-term trend. Despite a bearish Shooting Star candlestick forming on Tuesday, the day ended on a positive note, reducing its bearish significance.
In conclusion, EUR/AUD is showing promising signs of a potential up leg after bottoming out and recovering in the past week. With various reversal patterns and signals supporting a move higher, traders may look for a break above key resistance levels to confirm further upside potential. The MACD indicator and recent candlestick patterns add to the bullish case for EUR/AUD, pointing towards a possible extension of the current trend. As always, it is important to closely monitor price action and key levels to confirm the continuation of the upward momentum for the currency pair.
