Today has been a whirlwind for the EURAUD currency pair, as economic data from both sides of the globe stirred up excitement, poised to influence the ongoing market trend. Down under in Australia, month-over-month retail sales dipped to -2.7% from the previous 1.6%, falling short of the -1% consensus.
Meanwhile, the Eurozone added its own twist to the story, with GDP data exceeding expectations at 0.1% on a year-over-year basis, defying the forecasted 0%. Despite this positive turn, quarter-on-quarter GDP remained level at 0%, holding its ground against the projected -0.1% decline. The Euro, flexing its strength against a weakening Australian dollar, now commands attention. The spotlight shifts to the horizon, with Australian inflation data looming on the calendar for tomorrow.
Technical
On the 4H chart, a breakdown occurred at the ascending channel, resulting in the currency pair falling below the 50-SMA (blue line), 25-SMA (green line) and 100-SMA (orange line). The current trend approached the 61.8% Fibonacci golden ratio at 1.6337 before engaging in a pivot that could test the resistance of the current descending channel.
If the price moves above resistance at 1.6430, a potential trend reversal is on the cards. A retest might be triggered where the 100-SMA and 25-SMA converge, and an additional leg above this resistance could confirm a sustainable uptrend. Resistance at 1.6473 and 1.6511 could then come into effect in the longer term if the trend maintains its momentum.
However, failure to sustainably break above the 1.6430 level could result in a pivot back toward the Fibonacci midpoint at 1.6401. From there, the Fibonacci golden ratio at 1.6337 could again come under the spotlight, opening the potential for a steeper downtrend toward 1.6301.
Summary
It has been a busy session for the EURAUD currency pair as it navigated multiple data releases. Ultimately, the Euro gained strength on its counterpart, testing resistance at 1.6430, which could be pivotal in determining whether a trend reversal could occur.
Sources: Koyfin, Tradingview
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
