The depicted DAILY chart of the EUR/AUD pair illustrates a strong medium-term downtrend.
The WEEKLY chart shows a long-term Head and Shoulders reversal pattern being established with neckline roughly located around 1.4050.
Note the recently broken SUPPORT level at 1.4250 where the previous multiple prominent bottoms were established back in November 2014. This price level expressed multiple previous rejections manifested in the previous daily candlesticks.
The next target level for the pair is located around 1.4400 (a newly established congestion zone breached last week) provided that bulls keep fixating above 1.4250 on a daily basis.
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, the daily persistence above 1.4250 pauses the current bearish momentum giving more time for a corrective movement towards 1.4400 to take place.
