Technical Bias: Bearish
- Euro moved lower against the Australian dollar and broke an important support area.
- EURAUD might dive towards the previous low of 1.4200 in the near term.
- EURAUD support seen at 1.4275 and resistance ahead at 1.4350.
The Euro failed to sustain gains against the Australian dollar and traded below the 1.4350 pivot area, which could ignite further downside in the EURAUD pair moving ahead.
The Euro had to surrender at discretion of Australian dollar bulls as the EURAUD pair dipped below 1.4350 support level. Moreover, there was a bullish trend line on the 4 hour timeframe as well around the mentioned level, which was broken recently. The pair traded as low as 1.4275, and currently retesting the broken trend line. It looks like the Euro buyers might struggle to break the 1.4350 barrier, as the said level now coincides with the 38.2% Fibonacci retracement level of the last drop from the 1.4485 high to 1.4275 low. Moreover, there is an important confluence around of 100, 200, 50 simple moving averages and 50% fib level at 1.4380, which might act as a barrier for the EURAUD pair in the short term.
So, if the pair fails to trade higher then there is a chance of a move lower towards the last swing low of 1.4275. Any further losses could take the pair towards the 1.4200 handle. The 4-hour RSI is also struggling to break the 50 mark, which might encourage the Euro bears in the short term.
Westpac/Melbourne Institute (MI) Leading Index
Earlier during the Asian session, the Australia’s Westpac/Melbourne Institute (MI) Leading Index was released by the Australian Industry Group. The outcome was disappointing, as it registered a decline of 0.1%, down from the previous reading of 0.1%. However, there was a little impact on the EURAUD pair after the release.Get the 5 most predictable currency pairs