EURAUD found strong resistance level at the 1.5330 barrier, which acted as a turning point to the price, holding the pair beneath the 20-day simple moving average (SMA) as well. Currently, the price is testing the 23.6% Fibonacci retracement level of the down leg from 1.6235 to 1.4560 at 1.4953 and any falls below it would endorse the short- and medium-term bearish outlook.
The RSI indicator is falling further in the negative territory, while the MACD successfully surpassed above its trigger line, but it remains below the zero line, both suggesting more losses.
Should bearish dynamics dominate, the market might revisit the 1.4560 bottom before meeting the 1.4420 low in July 2017. Below that, the area around 1.3620, which halted downside corrections on February 2017 could another potential barrier in focus.
Alternatively, if the price manages to rebound above 1.4353, the 38.2% Fibonacci of 1.5195, which overlaps with the 20-day SMA could come next. A violation of this point may shift the attention towards the 1.5330 resistance and the 50.0% Fibonacci of 1.5390 ahead of 1.5445. A decisive close above the latter and hence above the 40-day SMA would increase speculation of a retest of the 61.8% Fibonacci of 1.5590.
In the medium-term picture, the downfall from 1.6235 is still active and hence the outlook remains negative. The 20-day SMA has further increased distance below the 40-day SMA, hinting that the downward pattern might hold for longer.
To summarize, EURAUD’s bias looks negative both in the short and the medium term.
