Technical Bias: Bullish
Key Takeaways
Euro climbed higher against the Aussie dollar and broke an important resistance to trade near 1.4080.
EURAUD forming a major support at 1.3900, which must hold for more upsides moving ahead.
In the Euro zone, the German import price index will be released by Deutsche Bundesbank, which is expected to rise by 0.7%.
EURAUD’s move lower can be considered as a part of correction, as the Euro buyers might appear around 1.3900.
Technical Analysis
The EURAUD pair recently managed to clear a critical confluence area at 1.3880-1.3900 levels. There was a bearish trend line on the 4-hour chart sitting along with the 50 simple moving average (SMA). Moreover, the pair also managed to break the 23.6% fib retracement level of the last leg from the 1.4443 high to 1.3719 low, and the 100 SMA. So, in short the recent break in the EURAUD pair was crucial and opened the doors for more upsides in the short term. If the pair moves lower from the current levels, then the broken confluence area of 1.3900 levels might act as a support moving ahead. The 4-hour RSI is well above the 50 level suggesting that the Euro buyers are here to stay.
If the EURAUD pair climbs higher from the current levels, then the most important resistance can be seen around the 50% fib retracement level.
Any further gains might take the pair towards the 200 SMA (4H).
German Import Price Index
Later during the London session, the German import price index will be released by Deutsche Bundesbank. The forecast is lined up for an increase of 0.7% in February 2015, compared to the preceding month whereas there was a decrease of 0.8% last time.
Trade Idea
One might consider buying dips in the EURAUD pair as long as the pair manages to stay above the 1.3900 level.
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