Today’s gain in EUR/AUD is the largest since May 18 and points to a potential double-bottom at 1.16.
It’s easy to see why shorts would want to cover a 12-week downtrend that extended 1400 pips.
A climb above last week’s high of 1.1770 would confirm the double-bottom and a retracement phase. Additional confirmation would come on a rise above 1.1857.
A reasonable target could extend to 1.2145 which is the 38.2% retracement and the 55-day moving average.
