EURAUD recorded some losses in the past few days, crossing below its 20-day simple moving averages (SMA) to touch the 1.6050 support level. The short-term picture thus seems to be slightly negative, though for the medium-term outlook looks to be positive, as it has been developing in an ascending channel since December 2018.
Short-term momentum indicators suggest the rally may be losing steam. The RSI seems to have flattened near its 50 zone, while the MACD appears ready to drop below its zero line soon, which would be a negative signal.
A potential pullback in the market may meet initial support near 1.6050, the latest low. A downside break would open the way for the 1.5900 psychological zone, but first need to challenge the 40-day SMA currently at 1.6000.
On the flipside, advances could stall near 1.6260 again, and if the buyers manage to overcome it, the next obstacle would be the return line of the channel around 1.6300. If the bulls pierce above that too, attention would turn to 1.6350, the October 2018 high.
Summarizing, the medium-term picture is bullish as the pair is trading higher over the last six months.
