EURAUD has been a major beneficiary of widespread AUD weakness in the last couple of weeks. This has helped to propel the pair to a key resistance zone around its 100-day SMA, a break of which could highlight some technical strength in the pair.
However, the pair is starting to look a little top heavy on shorter time frames - there is some bearish divergence between RSI and price on a 4-hr chart. Also, momentum seems to shifting across a few time frames to the downside, but this may suggest consolidation, as opposed to bearish price action.
The key test for this pair from a technical standpoint will be the aforementioned resistance zone around its 100-day SMA (see chart). If price fails to break here it may begin to retrace some of its recent gains, in which case we would be looking at the common Fibonacci retracement levels.
From a fundamental standpoint, both the euro and the aussie are looking somewhat weak, but the former appears more weak. A speech by ECB President Draghi tonight will an important event for the euro, as will a slew of manufacturing PMI releases tomorrow. For the Australian dollar, the market is going to be carefully analysing tomorrow’s flash September private sector reading of Chinese manufacturing PMI. The market is expecting the much-watched index to drop to 50.0, which is the level that separates pessimists from optimists. Later in the week, RBA Governor Stevens is speaking which always has the potential to move the aussie.
Source: FOREX.com
Recommended Content
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: Slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.