Technical Analysis – EURAUD bullish bias but possibility of overstretched rally
March 30, 2018 2:26 pm
EURAUD has advanced considerably since roughly the beginning of 2017, hitting a more than a 2-year high of 1.6190 during Wednesday’s trading session. However, the price dropped aggressively after it hit the aforementioned level, closing the subsequent days in the red.
The bearish sentiment is likely to continue in the short-term according to momentum indicators. The MACD oscillator is ready to create a bearish cross with its trigger line in the positive zone, while the RSI is moving south above the 50 level.
Should prices move lower, immediate support could come at 1.5850 level, which holds within the 20 and 40 simple moving averages (SMAs) in the daily timeframe. Below that, the 1.5600 psychological level which is slightly above the 23.6% Fibonacci retracement of the upleg from 1.3620 to 1.6190 could be a strong obstacle because any breach of this level could shift the outlook from bullish to bearish.
To the upside, resistance could be met at the 2-year high of 1.6190, while above that, the focus could shift to the 1.6250 level, taken from the high in February 2016.
EURAUD has advanced considerably since roughly the beginning of 2017, hitting a more than a 2-year high of 1.6190 during Wednesday’s trading session. However, the price dropped aggressively after it hit the aforementioned level, closing the subsequent days in the red.
The bearish sentiment is likely to continue in the short-term according to momentum indicators. The MACD oscillator is ready to create a bearish cross with its trigger line in the positive zone, while the RSI is moving south above the 50 level.
Should prices move lower, immediate support could come at 1.5850 level, which holds within the 20 and 40 simple moving averages (SMAs) in the daily timeframe. Below that, the 1.5600 psychological level which is slightly above the 23.6% Fibonacci retracement of the upleg from 1.3620 to 1.6190 could be a strong obstacle because any breach of this level could shift the outlook from bullish to bearish.
To the upside, resistance could be met at the 2-year high of 1.6190, while above that, the focus could shift to the 1.6250 level, taken from the high in February 2016.
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