EUR/AUD is below the long-term upwards moving trendline, taken from the 22nd of February last year. We can see that the pair is also being held by the short-term downside resistance line, drawn from the 25th of April this year. Thus, although the pair recovered notably las week, we will hold the view that the outlook remains cautiously negative, at least for now.
OUTLOOK (SCENARIO A / B)
Until the aforementioned downside resistance line is broken, we will stick to the scenario of EUR/AUD moving lower again. A break below the 1.5460 could be seen by the bears as a chance to get in and put some pressure on the pair. This could drive GBP/JPY towards the 1.5390 area, a break of which could open the path to 1.5315 or even 1.5275, which was the low for last week.
If the pair suddenly breaks and moves above the previously mentioned downside resistance line, EUR/AUD could then see more recovery and the pair could start aiming for higher levels. A break of the 1.5560 zone is possible to open the door for the 1.5620 level. If the bulls remain in the driver’s seat, then this could lead EUR/AUD to the next key area of resistance at 1.5730, a break of which could create a possibility for a move towards the 1.5775 mark.
Our oscillators are currently more in favour of the upside scenario, as the RSI is pointing up and targeting its 50 mark. The MACD, even though below 0, still is on a sharp rise and above its trigger line.
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- Technical Analysis