EURAUD has declined by almost 4% from the February 11 high of 1.6250 when it had retraced about 85% of the August-December downleg from 1.6562 to 1.4344. It’s been struggling to hold above the 61.8% Fibonacci retracement level for the second day. The 61.8% Fibonacci level at around 1.5710 has previously acted as a closing resistance level and could again cap the pair’s advance in the near term on weakening momentum.
RSI is looking neutral after levelling off around 50, while the stochastics continue to decline in oversold territory. This may indicate that any further losses are likely to be limited. Support to the downside could come at 50% of the Fibonacci level at 1.5455.
The pair has been making higher highs and higher lows since the December 3 low of 1.4344 and medium-term indicators remain bullish with prices above the 50- and 100-day moving averages. Prices would need to break above the February high to sustain the current uptrend.
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