Strong bearish signals for EUR/AUD

Source: Dukascopy Bank SA
The pair has established a consistent uptrend since year 2012, which it is currently testing at 1.4785 after a dip underneath. In addition to the broken trend-line, the weekly chart shows a descending triangle pattern running the trend, shifting our expectations towards a bearish scenario. A cluster of various time frame SMAs put pressure on the currency, which will, in turn, cause the rate to rise to the trend-line (1.5254) at first, just to dip towards the hourly trend-line and Bollinger Band cluster at 1.4748/50. Further demand pressure lies at 1.4731.

The rate lies close to the upper Bollinger Band, touching it repeatedly, which suggests that the pair is overbought. This might be the case, however, it is not supported by SWFX sentiment index data, which shows the Euro to be slightly (56%) oversold.

Weekly Chart
© Dukascopy Bank SA



Bull market still viable 

In case an upward breakout, however, does take place, the pair will target the daily PP and upper Bollinger Band cluster (1.4802) on its way north, followed by the 200-hour SMA at 1.4811 and 1.4857 after that. 

The currency pair will have to break out from the 1.5453 level in order to rebound and rally towards resistances at 1.5973 and 1.6149. A broadening bottom in the daily chart speaks in bulls' favour, while the broken senior and hourly uptrend reduces potential for northward movements at 1.4781/59. BUY signals from longer horizon aggregate technical indicators, namely the daily, weekly and monthly ones add more ground to the possibility of a bullish market over the following months. 

Daily Chart
© Dukascopy Bank SA



Fundamental surprises fail to induce major volatility 

EUR/AUD dipped 0.22% upon a positive Australian Building Approval data surprise evenly over the following hours. The shift came relatively limited in its amplitude, as the gauge showed 11.3% instead of the expected 0% change which could have induced much more volatility. A 0.2% surprise in the monthly German Import prices; however caused the Euro to rally 0.28%. A set of additional fundamental data, however, failed to move markets significantly. A negative retail sales surprise did not cause the appreciation of the Euro, unexpectedly pushing the pair even lower.

© Dukascopy Bank SA

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