EURAUD – Consolidates Near 1.7404 Amid Diverging Policy Stances

1. Technical Analysis

• Current Price: 1.7404
• Resistance Levels: 1.7488 → 1.7628
• Support Levels: 1.7245 → 1.6953

Trend Bias: Neutral-to-bearish

• EURAUD has struggled to reclaim 1.7628, a key resistance level tested multiple times. Failure to break this level reflects weak bullish momentum.
• The Relative Strength Index (RSI) at 42.94 indicates consolidation, lacking overbought or oversold signals.
• The 50-day SMA (1.7544) above price supports short-term downside, while the 100-day SMA (1.7087) remains bullish longer-term.

A break below 1.7245 could confirm the next leg toward 1.6953, aligning with the 61.8% Fibonacci retracement from the 1.5963 → 1.8554 rally.

2. Fundamental Factors Affecting the Currency Pair

Eurozone Outlook

• The ECB maintains a cautious stance, dialing back aggressive rate cut expectations.
• Recent comments from board member Isabel Schnabel reflect concern over persistent inflation, supporting a tighter-for-longer tone. However, the euro remains under pressure from its relatively dovish positioning compared to other central banks.

Australia Outlook

• The RBA's hawkish stance continues to support the Aussie dollar. Its focus is on containing inflation amid sticky price pressures.
• Resilient domestic data and robust commodity demand further reinforce AUD strength.

Watch for:

• RBA minutes and Eurozone PMIs this week
• Any shifts in tone from ECB or RBA speakers
• Price action around key technical levels (1.7245 & 1.7628)

EURAUD – H4 Timeframe

The footprints of the price action on the 4-hour timeframe chart of EURAUD show a healthy bearish trend with a meaningful pull-back depth. The current bullish move is one such example, which means we can expect to see a rejection from the supply zone and a continuation of the bearish trend.

EURAUD – H2 Timeframe

The price action on the EURAUD 2-hour timeframe chart reveals the SBR pattern tucked right in the middle of the previous supply zone. This adds a confluence to the bearish sentiment, and considering it overlaps the 86% Fibonacci retracement level, there is even more reason to look forward to the bearish continuation.

Analyst's Expectations: 

Direction: Bearish

Target- 1.72971

Invalidation- 1.76749

CONCLUSION

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