A classical double top pattern is unfolding on the EUR/AUD daily and weekly charts. The first top formed at the end of December, with the second top emerging on Monday of this week. Since then, the price has experienced a sharp decline, bringing it to a crucial neckline support, marked in yellow on the chart.
This neckline serves as the last key defense for buyers. Should the price close below this yellow support level, it would confirm the double top and trigger a strong sell signal. The potential target for this bearish move lies at the orange horizontal support, indicating a significant downside opportunity.
However, if the price bounces off the neckline and forms a long tail candle, it could signal renewed buyer strength. This would serve as an invitation to go long, suggesting a possible recovery from this critical support area.
For now, traders should closely monitor whether the price breaks or holds the neckline, as the next move will likely determine the medium-term direction for EUR/AUD.