The EUR/AUD currency pair is currently testing a critical resistance level, specifically the nine-day Exponential Moving Average (EMA) situated at 1.6308. This level coincides with the upper boundary of a descending channel that has influenced the pair’s movement. Observers note that a bullish trend may emerge if the 14-day Relative Strength Index (RSI) manages to rise above the pivotal 50 level. The primary support level is identified at a three-week low of 1.6163, which was established earlier this month.
Recently, the EUR/AUD has shown positive momentum, gaining for three consecutive days and trading around the 1.6300 level during the Thursday Asian trading session. An analysis of the daily chart reveals potential signs of a trend reversal, with the currency pair attempting to break free from its bearish channel.
While the current RSI remains just under 50, continued observation is necessary as a rise above this threshold could indicate a shift toward bullish sentiment. Should the EUR/AUD successfully breach the immediate resistance at the nine-day EMA, it may reduce the prevailing bearish outlook and open a path towards reaching its two-month high of 1.6600, which was recorded on November 1.
In terms of downside risk, if the EUR/AUD retracts past its three-week low at 1.6163, the bearish pressure may strengthen, potentially pushing the pair towards a significant psychological support level at 1.6000. This level has historically served as a reference point for traders and could be critical in maintaining the momentum of the currency pair.
