We’ve got big events ahead for both the euro and Aussie, making this textbook chart pattern on EUR/AUD one to watch this week for potential breakout setups! Check it out!
EUR/AUD 1-Hour Forex Chart by TradingView
If you haven’t yet heard, but this week should be action packed for EUR/AUD as Australia’s releasing its latest jobs data, China’s monthly data dump is ahead, and the European Central Bank will give its latest monetary policy statement.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on these events then it’s time to do some work by checking out the forex calendar and stay updated on daily fundamental news!
If you have done your fundies homework and got your biases and volatility expectations, then it’s time to move to the charts!
On the one hour chart above of EUR/AUD, we can see a very simple, textbook chart pattern: a symmetrical triangle! To put it simply, we’ve got lower ‘highs’ on the top and higher ‘lows’ at the bottom, with market behavior converging on the 1.6400 major psychological level.
This type of pattern can be viewed as a simple consolidation-breakout setup for both the bulls and the bears, depending on where the fundamentals takes the market.
So, if you expect the fundamentals to push euro higher / Aussie lower this week, be an the lookout for a sustained upside break and/or a retest-hold of the triangle pattern before considering a long risk management plan.
And vice versa if you expect the fundamentals to push the euro lower / Aussie higher this week, be an the lookout for a sustained downside break and/or a retest-hold of the triangle pattern before considering a short risk management plan.
The daily ATR is roughly 110 pips, so keep that in mind when setting potential stops and targets, especially with major catalysts ahead for both the base and counter currencies!
But what do you think? We love to hear everyone’s ideas on EUR/AUD so feel free to drop a comment below and share your thoughts!
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