After a powerful begin to the month, EUR/AUD has lost its bullish momentum and appears set to increase a longer-term downtrend.
Will EUR/AUD see losses in the subsequent trading sessions?
Try what’s up on the 4-hour time-frame!
EUR/AUD 4-hour Forex Chart by TradingView
Should you’re trading this week’s European Central Bank (ECB) decision, you understand President Lagarde and her gang are widely expected to chop rates of interest by one other 25bps. They might even be open to easing their policies further!
Meanwhile, Australia just dropped better-than-expected labor market data, which supports the Reserve Bank of Australia’s (RBA) decision to stick with its relatively hawkish policies.
Keep in mind that directional biases and volatility conditions in market price are typically driven by fundamentals. Should you haven’t yet done your homework on the euro and the Australian dollar, then it’s time to envision out the economic calendar and stay updated on day by day fundamental news!
EUR/AUD began the month strong, climbing from its 1.6000 lows to trade closer to the 1.6300 area of interest. But it surely looks just like the bulls have lost momentum, because the pair is finding it tough to attract in additional buying demand above 1.6300.
Specifically, EUR/AUD can’t bust through the R1 (1.6324) Pivot Point line near the 4-hour chart’s 200 SMA. More notably, the pair can’t appear to crack the ascending channel resistance that’s been around since August.
Does this mean EUR/AUD is able to turn lower?
Watch your charts closely for bearish candlesticks that would take EUR/AUD consistently below 1.6200 because it could lead on to the pair heading for the 1.6100 area near the S1 (1.6081) Pivot Point and mid-channel support. We could even see a return to the massive 1.6000 previous support zone if there’s enough bearish momentum.
Then again, EUR/AUD could attract enough demand at 1.6200 to push the pair back as much as the 1.6300 resistance.
Depending on overall risk sentiment, EUR/AUD could also see sustained buying pressure above the previous resistance. In case of consistent trading above 1.6300 and the channel resistance, be careful for a possible move to the 1.6400 or 1.6500 major psychological levels.
Whichever bias you find yourself trading, don’t forget to practice proper risk management and stay aware of top-tier market catalysts when trading this one. Good luck!