The FX Technical Analysis Team at Societe Generale suspects a possible double top in EUR/AUD, with an initial target of 1.3718/1.3675 a possibility ahead of longer term 1.27/1.25.
Key Quotes
“Recovery in EUR/AUD since 2012 seems to be drawing to a close after the pair has hit and rejected the multiyear channel median resistance at 1.6250/1.6385 last month. The pair has completed a classic ABC up move and formation of a probable double top at those levels indicates early signs of reversal.”
“It is currently near the lower limit of an ascending channel drawn since 2012 at 1.44 which is also close to the 76.4% retracement since last year lows.”
“Indicators diverged negatively in previous up move and they are also portraying bearish formation in the form of H&S highlighting support at 1.44 as temporary.”
“A break below will mean confirmation of the double top and it will lead EUR/AUD into a deeper down move initially towards 1.3718/1.3675 with possibility to achieve projected potential for the pattern at 1.27/1.25, also monthly channel limit.”
(Market News Provided by FXstreet)
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