As a result of declines which began in June, EURAUD arrived near 1.4440 support where yesterday bullish response occurred. Since then we have seen increases, which were further supported, among others by yesterday’s conference following the meeting of the European Central Bank.
As we reported yesterday, the decision itself and the statement from the ECB’s meeting negatively affected the European currency, but the conference and commentary by Mario Draghi strongly reinforced it.
Finally EURAUD broke resistance at 1.4635 level and reached next significant level at 1.4770, where today supply reaction has occurred.
For several hours we have seen declines, and as soon as this trend continues we should expect a re-test of the already mentioned 1.4635 level, which is currently in the area of 38.2% of the Fibonacci correction.
It is worth noting that this level was already significant on 14th and 17th this month, and (at least temporarily) halted supply before further declines. If also this time declines would be stopped in the vicinity of this zone, we could expect a bullish formation of inverted Head & Shoulders (iH&S).
Potential growth could continue in a slightly wider time horizon.