EURAUD Breaks Wedge Support: Bearish Momentum Builds
13 January 2025
In today’s technical analysis, we return to EUR to AUD, a pair we closely analyzed on January 9th. Back then, I identified a textbook rising wedge pattern, marked by the blue lines, developing within a broader downtrend that began in late December. Rising wedges in a downtrend often signal continuation to the downside, and today, that expectation was confirmed with a bearish breakout.
The price decisively escaped the wedge to the downside, aligning with the anticipated bearish scenario. The first leg of this decline has found temporary support on the lows from January 8th, marked with yellow color on the chart. While this level may serve as an initial stopping point, the bigger picture suggests a likely move toward the green horizontal support below. Such deeper retracements are typical in wedge-driven bearish trends.
For sentiment to shift back to positive, the price would need to re-enter the wedge and break above the daily highs. However, given the strength of today’s breakout, the probability of such a reversal appears rather slim. As it stands, the sentiment remains firmly bearish, with the market favoring further declines.