Technical Bias: Bullish
Key Takeaways
• Euro surged higher against the Australian dollar after a break of the 200 hourly SMA.
• Euro zone consumer price index release escalates a short-term correction risk for the EURAUD pair.
• EURAUD support seen at 1.4310 and resistance ahead at 1.4410.
The Euro declined against the US dollar yesterday, but the Australian dollar lost heavily, which in turn caught attention of the EURAUD buyers as they managed to take the pair higher.
Technical Analysis
There was a crucial contracting triangle formed on the hourly timeframe for the EURAUD pair, which was breached earlier. The pair even managed to break the 200 hourly simple moving average, paving way for the more upside in the pair. Currently, the pair is trading around the 50% Fibonacci retracement level of the last major drop from the 1.4544 high to 1.4201 low, and struggling to settle above the same. If the pair moves lower from the current levels, then it might head back towards the broken resistance zone around the 1.4310 level. The mentioned level also coincides with an important confluence area of 200 and 50 hourly SMA. So, the Euro buyers could appear to protect the downside in the pair around the 1.4310-00 levels.
Alternatively, if the Euro buyers manage to push the pair above the 50% fib level, then the next level of selling interest can be seen around the 1.4410 level, which is the 61.8% fib level. The hourly RSI is just around the extreme level, which might encourage sellers in the short term.
Euro Zone CPI and German Employment Data
There are a couple of risk events scheduled during the London session today, including the Euro zone consumer price index (CPI) and the German employment figures. If in any case, the outcome misses the forecast, then we can witness a slight downside in the Euro crosses.
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