One to watch: is EURAUD’s rally over?

December 11, 2014

EURAUD has been surging ahead for the last month or so, with its upward trend becoming steeper and steeper. Yet, the pair is now looking somewhat weak from a technical perspective. There is a bearish divergence between price and RSI on a 4hr chart which may highlight some underlying technical weakness.

Australia’s mildly encouraging employment report

From a fundamental perspective, the pair was suffering earlier today due to some AUD strength on the back of solid Australian employment numbers. Australia’s unemployment rate jumped to 6.3% in November as expected, but there was a surprisingly strong jump in part-time employment. Total employment rose 42.7K, underpinned by a 40.8K increase in part-term employment and a 1.8K increase in full-time employment. Also, the participation rate rose to 64.7% last month, beating expectations for it to remain at 64.6%.

It will be interesting to see if momentum starts to slow in EURAUD, which would support our short-term bearish technical bias. The 100hr SMA has proven to be a solid support line month; beyond here we’re watching 1.4830. It’s worth keeping an eye the ECB’s LTRO figures tonight and key economic data out of China tomorrow during the Asia session.

Publication source
FOREX.com information  FOREX.com reviews

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