EURAUD recorded decent gains in the past month, crossing above its 50- and 200-day simple moving averages (SMAs) to touch 1.6260, a high last seen in January. The short-term picture thus seems positive, though for the medium-term outlook to turn positive too, a break above 1.6350 is required.
Short-term momentum indicators, however, suggest the rally may be losing steam. The RSI seems to have flattened near its 70 zone, while the MACD appears ready to drop below its red trigger line soon, which would be a negative signal.
A potential pullback in the market may meet initial support near 1.6100, the May 20 low. A downside break would open the way for the 1.5960 zone, where both the 50- and 200-day SMAs are roughly located too.
On the flipside, further advances could stall near 1.6260 again, and if the buyers manage to overcome it, the next obstacle would be the 1.6350 area – which halted several advances in 2018. If the bulls pierce above that too, attention would turn to 1.6580, the 2015 high.
Summarizing, the big picture is neutral, with a break above 1.6350 or below 1.5340 needed to change that.
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