EURAUD has been underperforming in the past three days, challenging the 38.2% Fibonacci retracement level of the upward wave from 1.5340 to 1.6445 near 1.6025. The pair bounced off the 20-day simple moving average last Wednesday and is ready to complete a bearish crossover within the short-term SMAs.
Short-term momentum indicators are also pointing to a continuation of the bearish bias. However, the RSI is well below the 50-neutral level, heading towards the oversold zone, while the MACD is strengthening its negative movement. Moreover, the price has been developing within the Ichimoku cloud and may find the way to exit from it in the next few sessions.
If the pair continues the bearish move, the next level to have in mind is the long-term ascending trend line near the 50.0% Fibo of 1.5900. A penetration of this line would switch the positive tendency to neutral, hitting the 61.8% Fibonacci region of 1.5765.
Should prices reverse higher and pare previous days’ losses, they would meet resistance at the 20- and 40-SMAs, which overlaps with the 23.6% Fibo of 1.6185. A jump above this significant region would test the 1.6260 barrier ahead of the five-month high of 1.6445.
In the bigger picture, EURAUD has been trading within a rising trend line since December 2018, posting higher highs and higher lower. However, in the short-term view, the pair is likely to test the uptrend line before reversing higher again.
