The EUR/AUD is trading at the crossroad, as the market is trying to decide whether to confirm a bullish breakout, or continue a bearish trend in both the 4H and daily charts. Let’s take a look.
The 4H chart shows a bullish break from a downswing since October. However, as we wrap up the week, price has retreated and we will need more clues to figure out whether the market wants more bullish correction as we did this first week of November, or whether it will continue the downtrend from mid-October. The thing is that the daily chart also has a market at the crossroad. EUR/AUD broke above the year’s falling trendline but is now back in the cluster of SMAs and uncertain of whether the prevailing downtrend will continue, or whether there is further bullish correction, extending a rally started in September. Because these are fractal, or analogous pictures, we can use directional clues in the 4H chart to give us clues for the daily chart as well.
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