EURAUD. A Tale of Triangles and Decisive Breakouts

By Tomasz Wisniewski|

Published: December 12 2023, 13:06 GMT+0

EURAUD. A Tale of Triangles and Decisive Breakouts

In the world of currency trading, patterns often repeat, telling a story of market sentiment and potential future movements. The EURAUD is currently illustrating a fascinating narrative, one that revolves around its affinity for symmetric triangles and sideways trends.

The larger picture showcases a significant symmetric triangle pattern, outlined in black on the charts. This pattern, a hallmark of indecision where the forces of supply and demand are nearly equal, came to a dramatic conclusion in November with a decisive break to the downside. This breakout was a clear indicator of a shift in market dynamics, hinting at a potential bearish trend.

However, the story doesn’t end there. In the aftermath of this breakout, the EURAUD pair crafted yet another symmetric triangle, this time delineated by red lines. As we approach the vertex of this smaller triangle, the market seems poised on the edge of its seat, eagerly anticipating the pair’s next major move.

The breakout direction from this ongoing triangle is key. Should the pair break upwards, it will encounter a formidable horizontal resistance at 1.646, indicated in yellow. This level could cap the ascent and serve as a pivotal turning point. Conversely, a downward breakout would bring the pair face-to-face with a crucial support level at 1.628, marked in green.

The breach of these horizontal levels is crucial as it would provide a definitive trading signal. A surge above the yellow resistance suggests bullish momentum, potentially opening the doors for further gains. On the flip side, slicing through the green support might confirm bearish control, potentially leading to deeper losses.