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EUR/AUD: head and shoulders

Let’s have a look at the EUR/AUD cross. This week the pair is trading in the negative zone after 6 weeks of consecutive growth. Euro is retracing lower after having touched a 3 year high of 1.4235 on Monday. For now the downside is limited by the 1.3830 support (23.6% Fibo).

As can be seen from the weekly chart, the medium term picture is bullish. The pair is completing a reversal pattern similar to head-and-shoulders (top at 1.1605, right shoulder at 1.3170). Technically, the pair could extend the upside to 1.4650 (H&S formation, monthly Ichimoku).

Support: 1.3830 (23.6% Fibo from the 2008-2012 decline), 1.3720 (200-week EMA), 1.3520 (channel trend line), 1.3260 (neckline of the H&S pattern)

Resistance: 1.3970 (55-month EMA), 1.4650 (bottom of the monthly Ichimoku), 1.5190 (38.2% Fibo)

Chart. Weekly GBP/USD

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