EURAUD – Euro at Continued Risk of Weakness around 1.4550

Key Highlights

  • Euro trading around at an important support area versus the Aussie Dollar, and remains at risk of a break lower.
  • EURAUD recently traded around 1.4550 where it found sellers.
  • In the US, there are several economic releases lined up today, including the initial jobless claims, Markit PMI and personal income data.

EURAUD Technical Analysis

There was steep decline noted in the EURAUD pair recently, as it traded lower to test the 1.4400 support area where somehow buyers managed to protect losses. The pair is currently making an attempt to recover ground, and forming an interesting looking triangle on the hourly chart. The upside was stopped around the triangle resistance trend line, which is just below the 50% Fib retracement level of the last drop from the 1.4730 high to 1.4404 low. The mentioned Fib level is very crucial, as the 100 and 200 hourly simple moving averages are aligned around it.

In short, there is a major barrier for buyers around 1.4560-70 where sellers are likely to protect gains in case the pair moves higher. The pair is currently trading around the triangle support trend line, and remains at risk of a break lower.

EURAUD

On the downside, a break below the triangle might call for more losses towards 1.4450. In case of more weakness, the pair could head back towards the last swing low of 1.4404. The hourly RSI is silently moving below the 50 level, which might encourage the Euro sellers in the short term. Any further declines may perhaps depend on how the Aussie Dollar behaves in the upcoming sessions.

US Initial Jobless Claims

Today, the US Initial Jobless Claims, which is a measure of the number of people filing first-time claims for state unemployment insurance will be released by the US Department of Labor. The market is expecting an increase in the claims from 267K to 272K. If the outcome misses the mark, and the decline is more than the forecast, the US dollar might trade lower in the near term.

Similarly, there is one more release in the US, i.e. the Services Purchasing Managers Index (PMI), which captures business conditions in the services sector will be published by Markit Economics with the forecast of a rise to 56.7.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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