EURAUD recently made a forex breakout below the symmetrical triangle pattern on its 1-hour chart and is making a retracement at the moment. As you can see from the chart above, the pair bounced off its recent lows at the 1.4400 major psychological level and is pulling up to the broken triangle support.
This lines up with the 61.8% Fibonacci retracement level near the 1.4600 major psychological mark, which might keep further gains in check. If this holds as resistance, the pair could head back to its previous lows around the 1.4400 support area.
Forex Breakout Continuation
Stochastic is moving up for now, indicating that buyers are in control of price action and might push for more gains. Sustained buying momentum might even lead to a move back inside the symmetrical triangle and a test of the top at 1.4700.
Event risks for this forex breakout setup include the outcome of the Greek debt talks, as the anti-austerity government is expected to turn in its proposed list of economic reforms today. The EU has granted its request for a four-month bailout extension but the reforms might still be subject for approval – the lack of which might drive the euro down the charts and renew Grexit speculations once more.
There have been no major reports out of Australia so far, although commodity price speculations have been pushing its currency around this week. Talks of upgraded milk forecasts from Fonterra in their board meeting later this week have supported the New Zealand dollar and also boosted the Aussie. Meanwhile, the OPEC President’s announcement that an emergency meeting might be held also led to speculations of a cut in oil production and a potential rebound in prices.
Other catalysts include ECB Governor Draghi’s speech later today, as this might cause volatility among euro pairs. Fed head Yellen’s testimony might also impact overall market sentiment and lead to directional moves for this forex breakout setup.
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