EURAUD bulls pushed to a peak of 1.6678, slightly above the January 3 high of 1.6655, before sellers took control and sent the pair back down to 1.6230, which is the 61.8% Fibonacci retracement level of the up-wave from 1.5893 to 1.6784.
The gradual upward slope in the 200-day simple moving average (SMA) backs the positive sentiment in the medium-term. However, the flattened 50-day SMA and the completed downward reversal of the 21-day SMA, suggests a short-term pullback could be in the books. The MACD agrees with this view as the indicator loses positive momentum beneath its red trigger line. Also, the RSI has crossed below its 50 neutral mark and into the bearish territory.
If the bears manage to dominate, driving the price below the 50-day SMA and the 61.8% Fibo of 1.6230, the pair could come to test the 1.6100 hurdle which happens to also be the 76.4% Fibo. Moving lower, the price could home in to the 1.6024 inside swing and where the 200-day SMA presently resides.
If the 50-day SMA and 61.8% Fibo manage to withstand downside momentum, the pair could find initial resistance from the 50.0% Fibo of 1.6340. Moving north the 21-day SMA and 38.2% Fibo of 1.6447 could apply some pressure. Fracturing higher, a run up to 1.6574 resistance level could play out. Breaching the latter, the door would open for the 1.6678 peak.
In the medium-term picture, a drop under the 1.6100 handle would shift the outlook back to neutral, though only a close below the 1.6024 level would confirm the change.
