EURAUD tries to break a major resistance

In today’s analysis, we will circle back to EURAUD which we have analyzed several times in the recent past. The reason for that is the latest price movements on this instrument being very technical, which makes the usage of price action techniques very enjoyable.

The long story here is that EURAUD created a big double bottom formation, which allowed the price to climb above the 1.535 resistance (orange) and was an absolute key support since 2018. The comeback set positive sentiment on this instrument and has a confirmation in today’s movement.

Since the breakout of the 1.535 that happened in the middle of October until today, the price had been locked in the sideways trend (blue) between the 1.535 support and the 1.565 resistance (yellow). Today’s breakout will be a strong buy signal and a potential start of a new bullish wave, provided that the price manages to close the day above resistance.

On the other hand, the price coming back inside of the blue rectangle will be a false bullish breakout and a strong signal to sell. As for now, this option is less probable than the bullish one.