EURAUD was previously trading inside an ascending channel pattern and has surged past the resistance to signal a steeper climb. Price stalled upon reaching resistance at the 1.5600 mark, so a correction to the broken resistance could be due.
This lines up with the 38.2% Fibonacci retracement level around 1.5400-1.5450, which might keep losses in check. A larger correction could last until the 61.8% Fib at 1.5300.
Stochastic is on its way down so price could follow suit while sellers remain in control. The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still the upside, which means that the uptrend could resume at some point.
Australia’s jobs figures turned out weaker than expected as the economy added only 3.7K jobs in October versus the projected 17.8K gain. On a less downbeat note, the previous reading enjoyed a significant upgrade to show a 26.6K increase in employment while the unemployment rate improved from 5.5% to 5.4%.
Prior to this, Australia’s quarterly wage price index fell short of estimates at 0.5% versus 0.7%. Chinese reports also turned out weaker than expected, suggesting slower demand for raw materials.
As for the euro, the shared currency got a strong boost earlier in the week from stronger than expected flash GDP readings. The region’s trade balance also turned out stronger than expected and final CPI readings are due today.
By Kate Curtis from Trader’s Way