EURAUD is ticking higher in a horizontal trajectory trapped between the 1.6340 resistance and the 1.6144 support. A paused state of directional momentum is reflected in the Ichimoku lines, while the price rests around the upper surface of the cloud.
The mixed signals in the short-term oscillators further support the stall in the price. The MACD has barely inched above its red trigger line in the negative region, while the stochastic oscillator is entering the overbought territory.
To the upside, emanating pressure of 1.6243 over the last week has denied upside moves. If buyers manage to jump above this line, a revisit of the 23.6% Fibonacci retracement level of the downward wave 1.6826-1.6144 could unfold. Overcoming these constrictions could see resistance develop at the 1.6340-1.6370 region. Another leg up could tackle the 38.2% Fibonacci of 1.6404.
Otherwise, if sellers drive the pair below the cloud and the 20- and 40-period simple moving averages (SMAs) the 1.6144 support could interrupt the bears ahead of the six-month low of 1.6120. Should it fail to do so, the 1.6064 barrier, registered on June 9 could stop the bears.
Summarizing, initially the confines of 1.6340 or 1.6144 would need to be breached to revive directional momentum. Yet, the short-to-medium term picture remains neutral-to-bearish and a break below 1.6120 could resume the negative outlook in the long-term.
Written by Admin
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