EURAUD has been carving out a descending triangle pattern over the past couple of weeks, with lower highs connected by a descending trend line near the 1.6400 major psychological mark pressing down against a flat horizontal support around 1.6360.
Price is currently testing this floor, and how it reacts here could determine the pair’s next directional move. A bounce off the horizontal support could allow EURAUD to test the descending trend line once more, with a break above potentially opening the door to a measured move rally roughly equal to the height of the triangle formation.
On the other hand, a confirmed break below the 1.6360 support could trigger a selloff of similar magnitude, since descending triangles often resolve in the direction of the breakout with a comparable projected distance.
The 100 SMA is below the 200 SMA, reflecting a loss of bullish momentum after the pair’s earlier climb, and the gap between the two indicators appears to be narrowing, hinting at indecision in the broader trend. Price is currently hovering below both moving averages, which could reinforce their role as dynamic resistance on any near-term bounce.
Stochastic is turning higher from the oversold region, suggesting a potential return in bullish pressure that could support a bounce off the triangle’s lower boundary. RSI, meanwhile, still has room to climb before reaching overbought territory, so price could keep following suit if buyers manage to step in.
Should support hold, EURAUD could aim for a retest of the swing highs near 1.6440 or higher, provided the trend line resistance is cleared. However, a break and close below 1.6360 could confirm the bearish resolution of the triangle, potentially setting up a larger corrective move to the downside as the measured target comes into play.
EURAUD could take cues from the upcoming RBA decision, as the central bank is widely expected to keep rates unchanged but reiterate its hawkish lean.
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