EURAUD retreated after it found strong resistance on the almost 10-year high of 1.6658, returning below the 1.6350 strong barrier. The downfall in the price action is confirmed by the technical indicators. The MACD continues to head downwards after creating a bearish cross with its trigger line, while the stochastic oscillator weakened to enter oversold zone, with the latter supporting that a rebound could be around the corner. The positive cross between the 20- and 40-simple moving averages (SMAs) hints that the market trend might remain on the upside in the short term.
If the price continues to stand above the 20-day SMA and the 1.5980 support, the focus will shift up to 1.6380, taken from the highs on October 11. Moving higher, the bulls might find resistance around the decade peak of 1.6658.
Below that line though, the price could retest 1.5945, the 23.6% Fibonacci of the upleg from 1.3620 to 1.6658, before dropping lower towards the 1.5880 obstacle. Steeper declines may challenge the 40-day SMA near 1.5800 at the time of writing.
Concluding and looking at the long-term timeframe, EURAUD has been strongly positive creating higher highs and higher lows since February 2017.
