EUR/AUD traded higher during the European morning Friday after it hit support near 1.5700, the lower end of the sideways range that’s been containing the price action since the 25th of June. Bearing in mind that the rate continues to trade within that range, we would consider the short-term outlook to be neutral for now.
That said, given that the latest rebound came from near the lower bound of the range, we would expect the pair to continue trading higher for a while yet, perhaps for a test near the 1.5810 barrier. If that level fails to prevent the rate from rising further, then we may see extensions towards 1.5870 or the upper bound of the aforementioned range, at 1.5885.
We would like to see a clear and decisive break above 1.5885 before we start examining whether the outlook has turned back to positive. Such a break would confirm a higher high on both the 4-hour and daily charts and is possible to pave the way towards the 1.5965 zone, defined by the peak of the 9th of May.
Taking a look at our short-term oscillators, we see that the RSI, although below 50, has turned up. It could move back above 50 soon. The MACD lies below both its zero and trigger lines but shows signs of bottoming as well. These indicators corroborate our view that the pair could continue drifting higher, at least within the range.
On the downside, a clear break below 1.5700 could signal the downside exit off the sideways range and could initially aim for our next support of 1.5650. Another dip below that level could carry more bearish implications and could open the path towards the 1.5600 zone.
The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Brokers, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Brokers analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyzes and must therefore be viewed by the reader as marketing information. JFD Brokers prohibits the duplication or publication without explicit approval.
FX and CFDs are leveraged products. They are not suitable for every investor, as they carry high risk of losing your capital. You should be aware of all the risks associated with trading on margin. Please read the full Risk Disclosure.