By the end of 2014 the EUR/AUD pair declined rapidly off 1.5330 reaching down to 1.3970 where bullish recovery was manifested.
Recently the EUR/AUD pair has been trending upwards within the depicted bullish channel until the price level of 1.4800 was reached few weeks ago.
The price level of 1.4800 corresponds to the 61.8% Fibonacci level of the recent bearish swing. Around it a DOUBLE-TOP bearish reversal pattern was expressed.
Confirmation of the reversal pattern required DAILY fixation below the price level of 1.4500, which corresponds to the most recent bottom. This has already occurred yesterday.
If the current daily closure persists below 1.4500, initial projection target would be located around 1.4300 and then 1.4270 where the lower limit of the newly-established H4 channel is located.
Note the bullish spike of today’s daily candlestick. It represents the failure of bulls to gather enough momentum to push above 1.4500 enhancing the bearish side of the market.
DAILY closure below 1.4500 indicates a low-risk SELL entry. TP levels would be located around 1.4300 and 1.4270. SL should be set as daily closure again above 1.4500.
The material has been provided by InstaForex Company – www.instaforex.com