It looks like we are on a bear flag correction with the potential moving down increasing following the minuette zig-zag ( (a)(b)(c) ) appttern. The correction down to 1.618% FE validates this pattern.
The flag structure hints to a duplication of the first corrective leg down as it is dominant, which places the intermediate target for EURAUD near 1.55
It is likely that after a successful bearish breakout the currency pair slides towards the 61.8% FR near 1.59 first, and then slip lower between 78.6-88.6% FR levels.
This scenario could lead to lower lows forming a new low for intermediate wave 2.
Note that bears could start pushing lower at any point, or, alternatively, they could let market move higher for one last upside leg before pushing down!
This opportunity would be invalidated above 1.65 or so, or the intersection between price, time and the top trendline of the bear flag.
Stavros Tousios
Head of Investment Research
Orbex
The flag structure hints to a duplication of the first corrective leg down as it is dominant, which places the intermediate target for EURAUD near 1.55
It is likely that after a successful bearish breakout the currency pair slides towards the 61.8% FR near 1.59 first, and then slip lower between 78.6-88.6% FR levels.
This scenario could lead to lower lows forming a new low for intermediate wave 2.
Note that bears could start pushing lower at any point, or, alternatively, they could let market move higher for one last upside leg before pushing down!
This opportunity would be invalidated above 1.65 or so, or the intersection between price, time and the top trendline of the bear flag.
Stavros Tousios
Head of Investment Research
Orbex
