Technical Bias: Neutral
- Euro after breaking an important resistance against the Australian dollar seems to be consolidating gains in the short term.
- Dips might present a nice buying opportunity in the EURAUD pair.
- EURAUD support seen at 1.4400 and resistance ahead at 1.4485.
The Euro recently outperformed the Australian dollar, and as a result traded above the 1.4400 barrier, which might act as a support moving ahead for another leg higher.
There was an important bearish trend line on the 4 hour timeframe for the EURAUD pair, which was breached earlier during this past week. The pair has even settled above all three critical simple moving averages (200, 100 and 50), which can be considered as a bullish sign. The pair traded as high as 1.4485 recently, and currently correcting lower. If it falls closer to the broken trend line, then it is likely to find buyers around the 1.4400 support area. There is a cluster of supports around the mentioned area, as the 200 SMA (4H), 50 SMA (4H) and 38.2% Fibonacci retracement level of the last leg higher from the 1.4277 low to 1.4485 high sit around the stated area. So, the Euro sellers might struggle to pierce the 1.4400 support area, which might encourage buyers to take the pair higher again.
On the upside, initial resistance can be seen around the 1.4485 level. If sellers fail to defend the mentioned level, then a move towards the 1.4600 level might be possible in the short term.
Australian House Price Index
Earlier during the Asian session, the Australian House Price Index (HPI) data was published by the Australian Bureau of Statistics. The forecast was slated for a 1.1% rise. The outcome was better than expected, as the Australian HPI increased by 1.8%, which might help the Aussie dollar in the short term.
Published On Tue, Aug 12 2014, 05:13 GMT