The EURAUD pair advanced on Friday, posting a 0.5% gain during the EU session as the Australian dollar declined, while the EURUSD pair was trying to consolidate above 1.12.

The current resistance is at the 200-day moving average, located just above 1.57, where the price has already failed in November. Should the euro jump above that level, stop losses of short positions will likely be triggered, potentially sending the cross toward 1.59, where August and September lows are.

Alternatively, if bears defend the 200day average, we could see a renewal in the bearish pressure, targeting the 1.55 threshold. The support of cycle lows is below 1.54, and if the euro drops below it, the medium-term downtrend would likely be confirmed. 

It looks like the daily chart was oversold, resulting in a possible squeeze rally. First, however, bulls must push the single currency above the mentioned resistance to stage a reversal. 

Earlier today, the ECB meeting accounts from the central bank’s last meeting were released. The view was that judging based on the current developments, net purchases under the Pandemic Emergency Purchase Programme could be expected to end by March 2022, according to Reuters.

Moreover, it was seen as likely that in the December 2021 Eurosystem staff projections, the shorter-term inflation outlook for the euro area would once again be revised upwards.

EURAUD daily chart 3 PM CET

Source: https://www.axiory.com/analytics/technical-analysis/euraud-trying-to-recover-from-the-recent-selloff

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About Author

Peter comes from a background in corporate finance which began in 2013 when he completed the Corporate Finance Program at the University of Economics in Bratislava. He’s been actively involved in the market sector since 2008 and got his hands-on experience in trading in 2011. His experience in finance and trading continues not only as a market analyst at Axiory Intelligence but also through his studies to obtain a degree in Capital Markets. The study is in line with MIFID II regulations and is under the supervision of the European Regulator ESMA, which strongly emphasizes ethics and morale in investing and working with a client.

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