Since November last year, EURAUD has been on an upward trend in the form of a growth channel. After setting the maximum price for the year at 1.6790, the price started to fall. After reaching the support of the aforementioned channel there was a reaction of demand and the price returned to increases, which stopped in the area of Fibonacci abolition 61.8%.
Today has passed under the sign of declines, the price overcame the support and is now close to 50p below, creating the PA formation – bearish engulfing. Additionally we can spot a Head and Shoulders formation where the channels support is the neck line
On the above chart we can take a closer look at the situation on this pair. The rectangle marked in red is the mentioned formation BE (the bear market). If the price overcomes its lower limit, we can expect further falls by 110p to the nearest demand zone starting at the level of 1.5930. I would look for entering the short if I price would re-test the defeated channel support.
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