EURAUD Forex Technical Analysis – Jan 2, 2018

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EURAUD has been trending lower on its 4-hour time frame since breaking below the neckline of a head and shoulders pattern. Price has bounced off support and is now nearing a test of the resistance around the 1.5400 levels.
Applying the Fib tool on the latest swing high and low shows that the 61.8% level lines up with the channel resistance and could be enough to keep gains in check. In that case, the pair could fall back to the channel support at 1.5250 or the swing low closer to 1.5300.
The 100 SMA has crossed below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that the selloff is more likely to resume than to reverse. Also, stochastic has reached the overbought area to signal weakening bullish momentum.
European banks are set to reopen today and markets will resume trading, which would mean a return in volatility for the shared currency. Medium-tier reports namely Spanish and Italian manufacturing PMI, as well as the final manufacturing PMI readings from Germany and France, are up for release today.
As for the Aussie, there are still no major reports lined up for today but China has its Caixin manufacturing PMI due. Analysts expect a dip from 50.8 to 50.7 to reflect a slightly slower pace of expansion, but a stronger than expected read could keep the Australian currency propped up.
Later in the week, euro zone economies will be printing their final services PMI figures while China has its Caixin non-manufacturing PMI due. Australia’s trade balance is lined up for Friday, along with the euro zone flash CPI readings.
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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.