Another Flag in EUR-AUD?

By: Mike Kulej

Just when it seemed that we would never see day of the Euro rebounding against the Australian Dollar, the common currency staged an impressive rally. From the all time low of 1.2925, the EUR-AUD advanced to just above 1.3800, before stalling this week.

EUR-AUD Analysis January 26 2011


During this rally, there was only one small period of consolidation – a flag that formed between 1.34 and 1.35. Flags are normally continuation patterns and this one was no different, setting up this pair for extension of the bullish trend.

Predictive Flags?

The current consolidation also has the appearance of a flag, at least at this stage. If this pattern indeed emerges, it could signal more price runs up ahead. We still have to wait for the proper completion of this formation, because it is possible that some other pattern will take shape.

One should be aware that the longer a trend lasts, the less “predictive” flags become. Since this one would be a second one within the same major price swing, the follow up move is likely to be smaller than the preceding one. After all, every trend ends eventually, but this one is still bullish. 

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.