EUR/AUD looks heavy and vulnerable to downside following Friday’s bearish engulfing candle, leaving the price teetering just above 1.7184—the blow-off top high from August last year.
A break below 1.7184 could encourage bears off the sidelines, creating a setup where shorts may be established beneath the level with stops above for protection. EUR/AUD has tended to stall around big figures during its recent rally, putting 1.7100 and 1.7000 on the radar as initial downside targets. Beyond that, 1.6800 looms, having capped gains in late 2024 and early 2025.
RSI (14) is trending lower but remains overbought, suggesting bullish momentum may be starting to wane. MACD has yet to confirm a bearish signal, though it is curling towards the signal line.
On the fundamental side, the euro has priced in a lot of good news from recent fiscal and geopolitical developments, raising the bar for further upside. Meanwhile, the Aussie remains suppressed by elevated volatility and concerns over China’s growth trajectory amid escalating U.S.-China trade tensions, limiting its ability to capitalise on recent U.S. dollar weakness.
However, if those concerns ease, the Aussie could outperform. That puts today’s policy details from China’s government on boosting consumption in focus. While both the euro and Aussie are heavily tied to China’s economic health, AUD—along with other Asian currencies—stands to benefit more from an improvement in sentiment.
A break below 1.7184 could encourage bears off the sidelines, creating a setup where shorts may be established beneath the level with stops above for protection. EUR/AUD has tended to stall around big figures during its recent rally, putting 1.7100 and 1.7000 on the radar as initial downside targets. Beyond that, 1.6800 looms, having capped gains in late 2024 and early 2025.
RSI (14) is trending lower but remains overbought, suggesting bullish momentum may be starting to wane. MACD has yet to confirm a bearish signal, though it is curling towards the signal line.
On the fundamental side, the euro has priced in a lot of good news from recent fiscal and geopolitical developments, raising the bar for further upside. Meanwhile, the Aussie remains suppressed by elevated volatility and concerns over China’s growth trajectory amid escalating U.S.-China trade tensions, limiting its ability to capitalise on recent U.S. dollar weakness.
However, if those concerns ease, the Aussie could outperform. That puts today’s policy details from China’s government on boosting consumption in focus. While both the euro and Aussie are heavily tied to China’s economic health, AUD—along with other Asian currencies—stands to benefit more from an improvement in sentiment.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.