The depicted DAILY chart of the EUR/AUD pair reflects a steep medium-term downtrend initiated on December 17.
The WEEKLY chart shows a long-term Head and Shoulders reversal pattern with neckline roughly located around 1.4050. Approximate long-term projection target would be located around 1.2850.
Note the broken SUPPORT level at 1.4250 where the previous multiple prominent bottoms were established back in November 2014. It is now acting as ab Intraday resistance. It applied multiple bearish rejections during the last weeks.
On the other hand, a bearish FLAG pattern is being established above 1.4050 (Head &Shoulders pattern's neckline). Early confirmation requires DAILY closure below 1.4200-1.4220. Estimated projection target would be located around 1.4090 and 1.4000.
On the other hand, the daily persistence above 1.4250 pauses the current bearish momentum giving more time for a corrective movement towards 1.4400 to take place.
The material has been provided by InstaForex Company - www.instaforex.com
