Don’t look now, but it would seem that the euro has managed to outperform one of its counterparts. Which one is it? The Aussie, of course! The commodity currency has been hit hard following the disappointing jobs report from Australia.
EUR/AUD has been on a down trend since January 2014. In fact, if we connect the highs it hit on April, May and July, a falling trend line becomes apparent. The currency pair is now trading above 1.4450, trading past the resistance on the falling trend line.
Another bullish confirmation for the pair would be Stochastic which indicates that there is still room for price to move higher, as the lines still have not yet the overbought territory. So what do you think? Does this trend line break signal an upside rally for the euro is on the way?
Maybe. But be careful. It’s worthy to point out that the pair may soon encounter resistance at the 1.4500 psychological handle. The euro’s advances last week as well as back in October and November 2013 were cut short when it approached this level.
To top it off, the currency pair may also find resistance at the 100 SMA which looks to coincide around the area too.
To contact the reporter of this story: Jonathan Millet at email@example.com