EURAUD Downside Opportunities
EURAUD is looking interesting here. Following the breakout over late Q3/Q4 last year, price has since stalled, reversing from an attempted break above 1.5713. Price now looks to be resting in a potential head and shoulders formation, underpinned by the neckline support at 1.5206, suggesting potential for a deeper move lower on a break of current support.
Weaker EUR
EUR has softened recently as traders have begun looking ahead to a likely ECB pivot beyond the March meeting. While Lagarde has been consistent in signalling that further hikes will take place beyond March, EUR has already lost the bullish shine that we saw in the months building up to the February ECB meeting.
Shifting RBA View
At the same time, the market’s view on the Aussie and the RBA has shifted a little recently. A recent spike in inflation has fuelled speculation that the RBA will be forced to either step back up the pace of its tightening program or continue it a little longer than expected. Tonight’s RBA meeting minutes will offer some insight into these discussions and should the details lean to the hawkish side, AUD is likely to receive a fresh boost against EUR as traders recalibrate their outlooks.
Technical Views
EURAUD
The reversal back beneath the 1.5713 level looks to have formed a bearish head and shoulders pattern. Given the bearish divergence we saw on the move into those highs above 1.5713, the pattern suggests room for a further breakdown with a move below 1.5260 the trigger point for a deeper decline towards the 1.4780 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.