EURAUD Forex Forecast – Inching Close to Range Support

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EURAUD Forex Forecast - Inching Close to Range Support

EURAUD Forex Forecast - Inching Close to Range Support

EURAUD has been moving sideways since the start of the month, finding support around the 1.4500 major psychological level and resistance near the 1.4700 mark. Price just bounced off the top of the range and is moving back down to test the range support.

Stochastic has already reached the oversold region, indicating that buyers might be ready to push prices back up. RSI is also in the oversold area and suggesting that a bounce is set to take place.

For now, the short-term 100 SMA is above the longer-term 200 SMA, confirming that further gains are likely. A downward crossover, however, would hint that a selloff and range breakdown is possible. If that happens, EURAUD could be in for a longer-term decline.

EURAUD Fundamental Factors

Earlier today, Australia released a couple of disappointing reports, namely its 0.3% decline in the CB leading index and the smaller than expected 1.6% gain in the quarterly HPI reading. This suggests that further weakness might be in the cards for the economy, which might then prompt the RBA to cut interest rates in their next meeting.

As for the euro, the upcoming releases of the German and French manufacturing and services PMI readings could determine whether a bounce is possible or not. Small improvements are projected for the manufacturing industry but the services industry might show a small downturn. Stronger than expected data could still allow the euro to hold its ground and recoup losses from the Asian trading session.

Of course any updates on the Greek debt talks could also push this euro pair around throughout the week, as the debt-ridden nation is moving closer to a default. Hopes that a last-minute agreement will be made are keeping the shared currency supported for the time being but any confirmation that a Grexit is possible would mean losses for the euro.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.