EURAUD Update: Was it a false breakout?


The EURAUD cross was trading flat on Monday (although there has been some intraday volatility), and it was seen at around 1.66 at the time of writing.

Interestingly, today, there was no upward momentum, despite a massive plunge in equities and a solid risk-off sentiment. In times like these, the AUD usually declines notably, but today, it was holding flat.

The question is - was the latest strong breakout from the large consolidation pattern a false one? Or is the euro just retesting the previous resistance of this pattern, now support?

The first support is currently being tested and is located near 1.66, where September highs are located. Moreover, another support is at 1.6540/50, where August highs are located. This area is now the key for bulls, and if the cross drops below these supports, the latest breakout could indeed be a false one. 

In that case, we can expect a quick decline toward 1.6460, where the short-term uptrend line is seen. 

Alternatively, If the price holds the mentioned support, it could have been just a retest of the broken resistance (now support), which is technically a great time to enter a long position. In this case, the next resistance could be seen at last week's highs of 1.68, and bulls need to push the EURAUD cross above this level to confirm the bullish bias. 

The next hours will be exciting here. 
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