In October, the EURAUD currency pair has already been subject to my analysis 3 times. The last one can be read here: EURAUD – Head and Shoulders, Inside Bar – 26.10.2020
It is said up to three times lucky… In this case I lead with the market 3:0… because they all worked out quite well, now it’s time for the fourth analysis, because the situation on the chart almost asks to devote some time to it.

EURAUD Daily - bullish engulfing pattern
EURAUD Daily – today’s daily candle created a bullish engulfing pattern

We will start with a daily chart. Here we can see the two candles pattern that was created today – the Bullish Outside Bar. Such formations usually appear at the end of the trend (it can be as well a long, medium and short term trend.

The strength of this pattern is increased by the fact that the minimum of the bullish candle is on the support of the rising channel. MACD indicator is in the bullish phase.

ongoing analysis

EURAUD H4 - small bullish engulfing (green rectangle) in the large (red rectangle)
EURAUD H4 – small bullish engulfing (green rectangle) in the large (red rectangle).

On the H4 chart we can take a closer look at the possible scenarios. In my opinion, the probability of breaking the top of the formation is greater than the bottom. This is indicated by the bullish outside bars on D1 and simultaneously on H4 (small green rectangle).

The MACD is increasing on both time intervals H4 and D1.
Possible demand target is the nearest supply zone and resistance of the channel, currently – 1.6850.

We must also remember the fundamentals, i.e. tomorrow’s European Central Bank meeting.

The ECB will decide tomorrow on interest rates and during the conference we will find out what monetary policy tools will be used in the near future. The volatility of the EUR and currency pairs associated with it may be high, so it may be better to wait until the end of the conference Mrs. Lagarde – the current President of the ECB.

I also recommend:

Trading with PA+MACD, or how to increase the probability of winning

Scalping on range bars

ongoing analysis

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