FXstreet.com (Barcelona) - The EUR/AUD finished the day sharply higher, climbing 87 pips to close at 1.3587. The pair was up an impressive 6.9% in May.

The FXStreet.com Trend Index remains slightly bullish on the daily chart, while the ob/os index reads extremely overbought. Short term moving averages remain bullish, with price sitting above both the upward sloping 9 and 20 dma’s. The RSI (14) is also in bullish set up, consolidating above the 70 level. However, it should be noted the RSI (14) is showing a bearish divergence as price has continued to make new highs, but momentum has not been able to follow. Often times this may be a sign a market is due for consolidation or a small correction.

Initial support sits at 1.3471 (previous day low), followed by 1.3419 (the 9dma). First resistance sits at 1.3587 (bearish engulfing candle on 60min chart), followed by 1.3682 (the 200dma on weekly chart). Given the fact both trending indicators and RSI (14) are in a strongly bullish technical set up, it may help keep pullbacks over the coming days limited.