EUR/AUD remains under pressure as it continues to trade within a trading range in the short-term over the last two months with upper boundary the 1.6140 resistance level and lower boundary the 1.5775 support level.
The price hit the long-term ascending trend line and rebounded creating two consecutive bullish days. The near-term technical indicators suggest a bullish movement.
Looking at the daily timeframe, the RSI indicator is holding below the 50 level but is sloping upwards, while the stochastic oscillator is moving higher, following the bullish crossover within the %K line and %D line.
Upsides moves are likely to find resistance at 1.6140. Moving above this region would help the pair to endorse the bullish structure and touch the 1.6190 strong barrier, taken from the high on March 28. Further gains would drive EURAUD towards the 1.6580 key level, identified by the August 2015 high.
Should the price reverse lower and decline below the uptrend line, immediate support should come at the 1.5600 handle, which stands near the 23.6% Fibonacci retracement level of the upleg from 1.3620 to 1.6190. Below that, the 38.2% Fibonacci is another major support around the 1.5210 level.
Overall, EUR/AUD has been developing within an ascending movement since February 2017 and touched the diagonal line several times in the past.
by Melina Deltas, XM Investment Research Desk
Melina joined XM in December 2017 as an Investment Analyst in the Research department. She can clearly communicate market action, particularly technical and chart pattern setups. Her technically focused method looks mainly at price action across multiple time frames to capture big moves that develop over the years. She has more than 3 years of experience in analyzing financial markets, specializing in forex, indices, and commodities.
Melina studied Pure Mathematics at Lancaster University and has a Master’s Degree in Monetary and Financial Economics from the University of Cyprus. Currently, she is an associate member of the Society of Technical Analysts (STA) and a Certified Financial Technician (CFTe).