EURAUD has declined considerably after touching the 1.6415 level in December 2020. During Wednesday’s trading, it posted a 21-month low of 1.5767, while it is currently not far above that nadir.
The flatten red Tenkan- and blue Kijun-sen lines serve as a testament to the negative short-term momentum that is in place. The MACD, though, is signaling a potentially oversold market; a near-term reversal should thus not be ruled out, while the stochastic is gaining ground, moving towards the overbought area.
Immediate support to further declines may be taking place around the 21-month low of 1.5767, while the 1.5682 hurdle, reached in April 2019 could provide additional support in case of steeper losses. More decreases could take the market far lower towards the 1.5340 barrier, taken from the low in December 2018.
A move to the upside may meet resistance around the 20-day simple moving average (SMA) at 1.5866. The region around the 23.6% Fibonacci retracement level of the downward wave from 1.6420 to 1.5767 at 1.5920 and the 40-period SMA at 1.5940 could act as additional barriers in case of stronger bullish movement. More increases, the 38.2% Fibonacci of 1.6017 could come in focus.
The short-term picture is looking predominantly bearish at the moment, with price action taking place below the 100-period simple moving average line, as well as below the Ichimoku cloud, though, caution is warranted in the near-term as there are signs of an oversold market in technical indicators.
