EURAUD is slowly trending higher inside a rising wedge formation visible on the 4-hour time frame. Price just bounced off the resistance and might be due for a pullback to support around the 1.5450 minor psychological level.
Stochastic is on the move down to show that sellers have the upper hand, but the oscillator is also dipping into oversold territory to signal exhaustion among sellers. Turning higher could lead to a bounce off the nearby inflection points.
The 100 SMA is still above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This means that the uptrend is more likely to continue than to reverse. The 100 SMA lines up with the bottom of the wedge as well, adding to its strength as support.
Economic data from Australia has been mostly weaker than expected last week while today’s NAB business confidence index release showed a decline from 11 to 9. Both the RBA and ECB kept policy unchanged, with the latter removing its phrase on increasing QE before Draghi tried to downplay the move.
Only French private payrolls and the Italian unemployment rate are up for release today. This suggests that euro pairs could be more sensitive to data from its counterparts. So far, the pickup in risk appetite has been positive for the Aussie.
By Kate Curtis from Trader’s Way