EURAUD - Australian Dollar Could Make A Sustained Move Lower Against Euro

Technical Bias: Bullish

Key Takeaways

• Euro surged higher against the Australian dollar and broke an important resistance area.

• Any correction from the current levels might be considered as a buying opportunity.

• EURAUD support seen at 1.4100 and resistance ahead at 1.4300.

The Euro managed to gain traction against the Australian dollar, as the latter one got weakened against almost all major currencies. Moving ahead, more gains are likely in EURAUD.

Technical Analysis

There was a major trend line on the 4 hour timeframe for the EURAUD pair, which was broken earlier during this week. This particular break can be considered as significant, as it opened the doors for further upside acceleration towards the last swing high. Currently, the pair is trading above the 61.8% Fibonacci retracement level of the last drop from the 1.4484 high to 1.3794 low. However, the pair is struggling to close above the 200 simple moving average (SMA) – 4H. So, there is a chance that the pair might move a bit lower from the current levels. On the downside, the broken trend line area might provide support in the near term. The most important point to note here is that the 100 SMA (4H) also sits around the same area. So, there is a major support around the 1.4100-1.4080 area. Any further downside should be limited unless the Euro starts moving lower.

The 4H RSI is around the extreme levels, which means a correction might be on the cards. On the upside, the 76.4% fib level might act as a resistance around the 1.4300-1.4320 levels.

Euro Zone Industrial Production

Later during the London session, the Euro zone industrial production data will be released by the Eurostat. If the outcome surpasses the expectation of a 0.5% gain, then the Euro might climb further in the near term.