EUR/AUD Is Developing Withing A Wide Consolidation, A Breakout To The Downside Is Possible

EUR/AUD is developing in a rather wide consolidation, forming a figure on the D1 time frame which I interpret as a pennant.

On the same time frame we can notice that for the past eight days the pair has been forming small bars the bodies of which overlap and which have formed the barbed wire pattern.

From these technical analysis observations we can conclude that that in case of a breakout below the support trend line we could expect the pair to depreciate and its first target to the downside would be around 1.4700 – 1.4650. If it reaches the limit of the pennant too the drop could be around 750 pips.

In case there is a breakout to the upside, however, the first target would be around 1.5400-1.5450 followed by 1.5550.