EURAUD had started a strong rally on July 27. However, this uptrend later faded and turned negative after the pair recorded a triple top recently, turning the bias to bearish.
In the near-term, the picture is bearish to neutral according to the RSI. The indicator is below the 50 neutral-perceived level but it has been moving sideways over the last couple of trading days.
Turning to the Ichimoku analysis, the pair has crossed below the cloud – this is a bearish signal. Additionally, the price violated the 50-period moving average (MA) on the downside, while it is currently testing the 200-period MA as well. Moreover, the fact that the Chikou-span (green line) broke below prices to enter the cloud, and the Tenkan-sen is located below the Kijun-sen, strengthens the bearish structure on the four-hour chart. However, bear in mind that the bullish cross between the 50- and the 200-period MA that was recorded on August 8 remains in place.
Should the price head down, an immediate support could be provided by the 2-½ week low of 1.4735 reached on August 17. A further movement to the downside could find support at the psychological level of 1.4600 before the pair targets the eleven-week low of 1.4421 (July 20).
Alternatively, if prices rise, a strong resistance might be found around the 1.4900 key point, where the 50-period MA is also roughly located. A break above would turn the attention to the one-month high of 1.1508 (August 14) for additional resistance while steeper increases would shift the focus to the 1.5100 key level.
