Dukascopy Bank Team
Dukascopy Bank SA
AUD/USD 4H Chart: Double Top
Comment: Since the beginning of March the Aussie has been appreciating against the US Dollar, eventually forming a double top pattern. Since double tops arise at the end of the upward trends, a bearish trend is soon likely to take over. Technical studies also imply a decline, but in longer timeframes a recovery is possible, suggesting that the pattern might turn into a triple top. This could occur only if demand, represented by the 200-period SMA around 0.7454, is sufficient to cause a rebound. A failure to regain the bullish momentum is to set the AUD/USD pair on a bearish path, until the March low of 0.7108 is reached, with another interim support located at 0.7415, namely the March 16 low. Meanwhile, 68% of traders hold long positions.
EUR/AUD 1H Chart: Broadening Rising Wedge
Comment: The EUR/AUD cross is now poised for more weakness, as that is the direction, where the rising wedge usually breaks out. Moreover, market sentiment is bolstering this possibility, as 54% of all open positions are short. However, the 55-hour SMA has been reinforcing the wedge’s lower border since it first emerged, making it difficult for a breakout to occur just yet. In case this support area is pierced, the exchange rate should continue falling towards the March 30 low of 1.4716; on the other hand, if bulls push the pair higher, the target will be the pattern’s resistance line, unless the April’s high of 1.5160 manages to reverse the rally earlier. According to technical indicators, the EUR is to continue rising against the Aussie in the medium term.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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