Is this euro pair feeling exhausted from its climb?
EUR/AUD made a couple of failed attempts to bust through the 1.7400 area and is now inching towards the neckline support at 1.7100.
Don’t miss out on this potential reversal formation that’s brewing on its 4-hour time frame.
EUR/AUD 4-hour Forex Chart by TradingView
Dovish RBA expectations and tariffs fears had been propping EUR/AUD higher in early March, but it looks like the rally is starting to run out of steam.
The pair struggled to extend its climb past the 1.7400 major psychological mark, as the Australian central bank recently shifted to a more neutral stance, deciding to keep rates on hold during its latest policy meeting.
Meanwhile, the ECB remains inclined to cut rates further, although policymakers have stressed their data-dependent gradual approach.
Are we about to see consolidation or a trend reversal from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the euro and the Australian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price has yet to test and break below the neckline at S1 (1.7100) and a major psychological level to confirm a potential downtrend, which could then last by the same height as the chart formation or roughly 300 pips.
Keep your eyes peeled for reversal candlesticks at this support zone, though, as this could mean rangebound price action for EUR/AUD. In this case, look out for a possible bounce back up to the highs or at least until the area of interest near the pivot point level and 1.7200 mark.
Don’t forget that the 100 SMA is safely above the 200 SMA on this time frame, hinting that support is more likely to hold than to break.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
