EURAUD held in losses for the second day in a row after flirting with a fresh five-month peak of 1.6590. The drop to the 23.6% Fibonacci retracement level of the upward move from 1.5340 – 1.6790 and near the 1.6430 key support, has sustained the neutral mode in the medium-term.
The RSI in the daily chart continues to lose direction in the positive area, while the stochastic is creating a bearish cross within the %K and %D lines in the overbought zone. The red Tenkan-sen keeps flattening above the blue Kijun-sen line, reducing chances for a meaningful recovery in the short-term trading.
However, should the price close comfortably below the 1.6430 support level, traders could add more downside pressure to the pair, pushing the market down to 1.6320. The 38.2% Fibo of 1.6230, which coincides with the 20-day SMA could come into focus.
In the positive scenario, the market could retest the five-month high of 1.6590. If this proves easy to overcome this time, the increase may next pause somewhere between the 1.6675 resistance and the 1.6790 barrier, taken from the peak on August 7.
In brief, EURAUD is missing a trend in the medium-term and only an aggressive rally above 1.6790 would reinforce the long-term bullish picture.
