Technical Analysis – EURAUD surges higher
- EURAUD trades aggressively higher today
- The upleg has paused at two key SMAs
- Momentum indicators are mostly bullish
EURAUD is recording a sizeable upleg today following the weak Australian GDP print for the third quarter of 2024 that somewhat opened the door to an RBA cut in early 2025. The rally has paused at the 100- and 200-day simple moving averages (SMAs), with euro bulls recovering a good chunk of their recent losses in fewer than 10 sessions. The overall trend remains negative though, supported by the political shenanigans in the eurozone.
Meanwhile, the momentum indicators are mostly bullish. The RSI has climbed once again above its midpoint, and it appears eager for a move higher. More importantly, the stochastic oscillator is edging higher, towards its overbought territory, and building a good gap from its moving average. Only the Average Directional Movement Index (ADX) is ignoring the currently bullish move, as it continues to point to a trendless market.
Should the bulls remain thirsty, they could try to push EURAUD above the 100- and 200-day SMAs and towards the 23.6% Fibonacci retracement level of the August 26, 2022 – April 26, 2023 uptrend at 1.6406. If successful, the door could then be wide open to retest the August 24, 2015 high at 1.6583.
On the other hand, the bears are probably keen on retaking market control. Their first task is probably to keep EURAUD below the 1.6363-1.6375 area, and then gradually push it lower towards the 1.6256-1.6250 region. It would be a strong win for the bears if they managed to quickly erase today’s price action, giving them the opportunity to stage a new selloff towards 1.6000.
To sum up, EURAUD is trading higher today, but the bulls need to overcome some key resistance levels for the current rally to have legs.
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