Technical Analysis – EURAUD rally stumbles upon the first big hurdle
EURAUD trades a tad below a key resistance area
Decent upleg recorded from the 12-month low
Momentum indicators are mostly bullish
In the meantime, the momentum indicators are mostly supportive of this upleg. The Average Directional Movement Index (ADX) is edging higher, well above its 25-threshold and thus signalling a decent uptrend in place. Similarly, the RSI is trading at the highest level since early 2024. More importantly, the stochastic oscillator has managed to return inside its overbought territory (OB), building a good gap from its moving average. However, a bearish divergence could be forming as the higher high recorded in the stochastic oscillator has been matched with the lower high in EURAUD.
Should the bulls remain thirsty, they would try to overcome the 1.6208-1.6250 area and gradually push EURAUD towards the 100-day SMA at 1.6346. If successful, the door could then be open to test the 1.6406-1.6428 area, which is defined by the 23.6% Fibonacci retracement of the August 26, 2022 – April 26, 2023 uptrend and the 200-day SMA.
On the other hand, the bears are probably keen on retaking market control and defending the 1.6208-1.6250 area, which is populated by the February 11, 2016 high and the 50-day SMA. A move below the April 19, 2024 trendline would reinforce the medium-term bearish trend in place since early March, with the bears then possibly preparing for a retest of the 2024 low at 1.5996.
To sum up, EURAUD bulls are in control but another strong upleg is needed to cancel out the prevailing medium-term bearish trend.To continue reading this article in full, log in to your Members Area
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