EUR/AUD Selloff Pushes RSI Towards Oversold Zone
EUR/AUD takes out the April low (1.6036) as it extends the series of lower highs and lows from last week, and the Relative Strength Index (RSI) may show the bearish momentum gathering pace as it approaches oversold territory.
EUR/AUD Rate Outlook
EUR/AUD continues to trade to fresh monthly lows after failing to hold above the 50-Day SMA (1.6351), with the moving average no longer reflecting a positive slope as the exchange rate posts a five-day selloff.
At the same time, the RSI sits at its lowest level since July 2022 and a move below 30 in the oscillator is likely to be accompanied by a further decline in EUR/AUD like the price action last year.
A break/close below the 1.5900 (38.2% Fibonacci extension) to 1.5970 (50% Fibonacci extension) zone opens up the 1.5800 (38.2% Fibonacci extension) handle, with the next area of interest coming in around 1.5590 (23.6% Fibonacci extension) to 1.5660 (23.6% Fibonacci extension).
However, failure to break/close below the 1.5900 (38.2% Fibonacci extension) to 1.5970 (50% Fibonacci extension) zone may keep the RSI out of oversold territory, with a move back above the 1.6300 (61.8% Fibonacci extension) to 1.6380 (78.6% Fibonacci extension) area raising the scope for a test of the monthly high (1.6471).
--- Written by David Song, Strategist
EUR/AUD Rate Outlook
EUR/AUD continues to trade to fresh monthly lows after failing to hold above the 50-Day SMA (1.6351), with the moving average no longer reflecting a positive slope as the exchange rate posts a five-day selloff.
At the same time, the RSI sits at its lowest level since July 2022 and a move below 30 in the oscillator is likely to be accompanied by a further decline in EUR/AUD like the price action last year.
A break/close below the 1.5900 (38.2% Fibonacci extension) to 1.5970 (50% Fibonacci extension) zone opens up the 1.5800 (38.2% Fibonacci extension) handle, with the next area of interest coming in around 1.5590 (23.6% Fibonacci extension) to 1.5660 (23.6% Fibonacci extension).
However, failure to break/close below the 1.5900 (38.2% Fibonacci extension) to 1.5970 (50% Fibonacci extension) zone may keep the RSI out of oversold territory, with a move back above the 1.6300 (61.8% Fibonacci extension) to 1.6380 (78.6% Fibonacci extension) area raising the scope for a test of the monthly high (1.6471).
--- Written by David Song, Strategist
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