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Fan Yang

EUR/AUD Bullish Ahead of the ECB Statement

After seeing EUR/AUD fall from around 1.47 in mid-October to 1.4209 by the end of the month. Since then, EUR/AUD has been bullish in November so far.

EUR/AUD 4H Chart 11/5(click to enlarge)

The rally first broke above a falling trendline and completed an inverted head and shoulders pattern. 

Today, it has extended above the inverted H&S pattern and additional broke above the 200-, 100-, and 50-period SMAs in the 4H chart, above a support pivot area around 1.4450. 

This is another step toward bullish reversal from the mid-October downswing, so it exposes the 1.4705 high.  

The ECB will announce its monetary policy decision tomorrow, and we will see then whether this bullish reversal will hold. If price falls back below 1.4350, the bullish outlook might need to be shelved, and a break below 1.43 would likely be part of a bearish continuation.

Holding above 1.4375-1.44 with the ability to come back above 1.45 would keep the EUR/AUD bullish with the 1.47 area in sight. 

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