EURAUD spiked to a fresh one-month peak of 1.6440 earlier today. The price completed a double bottom formation after breaching the 1.6350 strong barrier, shifting the bias from bearish to bullish. Meanwhile, the stochastic oscillator is trying to post a bearish crossover in the overbought region, while the rising MACD continues to hold above its trigger and zero lines.
The 1.6520 barrier is the nearest resistance that could reject any attempt higher. In case it fails to do so, and the price extends positive momentum, the 1.6550 high registered on August 14 could take over.
On the flip side, a downside reversal below the 1.6350 support could bring the 20-period simple moving average (SMA), which overlaps with the blue Kijun-sen line at 1.6292, back into view. Should it give way, the 1.6250 number and the 40-period SMA, which are slightly above the Ichimoku cloud, could be the next target. Steeper declines could also reach the 1.6170 – 1.6190 zone.
In the short-term window, the sentiment has turned positive following the break above 1.6350. In the medium-term picture, a rally above 1.6550 is required to restore optimism for an up-trending market.
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