EURAUD stretched its bullish rally to a ten-and-a-half-year high of 1.7127 in the last week before pulling lower. The MACD seems to be gaining momentum above its red signal line, the RSI is still hovering around its 70 overbought mark and the red Tenkan-sen is holding well above the flat blue Kijun-sen, all signaling a more positive trading in the short term.
The market trend is likely to hold on the upside as long as the price holds far above its moving averages and the Ichimoku cloud.
Immediate resistance is coming from the multi-year high of 1.7127 ahead of the 161.8% Fibonacci extension level of the downward movement from 1.6790 to 1.5890 at 1.7320.
Alternatively, the pair could touch the 1.6790 support level, registered on August 7, while steeper declines could move the market towards the 23.6% Fibonacci retracement level of the up leg from 1.5340 to 1.7127 at 1.6705. Clearing this zone, the next stop could be around the 1.6675 and the 1.6590 levels.
In the long-term picture, the sentiment turned bullish after the price surpassed the 1.6790 number.
