EURAUD is ticking higher over the last sessions after rebounding off the five-week low of 1.6150. The stochastic oscillator created a bullish crossover within its %K and %D lines, while the MACD is trying to jump above its trigger line in the 4-hour chart. However, the 20- and 40-period simple moving averages (SMAs) are still moving down.
Should prices decline, immediate support could be found around 1.6150, an area which has provided as strong support on July 22. Then a leg below that level, the pair could meet the 1.6100 – 1.6115 region, continuing the sharp sell-off.
However, if the market manages to pick up speed, the 23.6% Fibonacci retracement level of the downward move from 1.6550 to 1.6150 at 1.6243 could offer nearby resistance ahead of the 20-period SMA at 1.6274. A significant close above the latter would break the 38.2% Fibonacci of 1.6300 raising chances for further increases.
In the medium-term, the outlook remains negative since prices hold below all the moving average lines and the bearish cross between the 20- and the 200-day SMA stays in place.
