The depicted charts of the EUR/AUD pair illustrates a prominent downtrend on both the daily and weekly charts.
The WEEKLY chart shows a long-term Head and Shoulders reversal pattern being established with neckline roughly located around 1.4050.
The daily chart shows:
- The recently broken SUPPORT level at 1.4230 where the previous multiple prominent bottoms were established back in November 2014. Today, this may constitute an intraday resistance.
- The recent RESISTANCE level around 1.4400 where a newly established congestion zone was breached last week.
On the other hand, a bearish FLAG pattern is being established above 1.4050 (H&S pattern's neckline). Confirmation requires DAILY closure below 1.4050-1.4000.
Estimated projection target would be located around 1.3820.
On the other hand, daily persistence above 1.4240 pauses the current bearish momentum giving more time for corrective movement towards 1.4400 for retesting.
