Missed the range breakout on EUR/AUD?
If you’re still bullish, you might wanna keep these pullback levels on your radar.
As you can see on the 4-hour chart below, the pair is in correction mode to these potential support zones marked by the Fibonacci retracement tool.
Now the 61.8% retracement level is right smack in line with the former range resistance, which might be a prime entry point for buyers.
A shallow pullback could already find support at the 50% Fib at 1.6562 or even the 38.2% level just slightly above the 1.6600 major psychological mark.
If any of these are able to keep losses at bay, EUR/AUD could resume the climb to the swing high at 1.6772 or higher. So how are technical indicators looking?
The 100 SMA is above the 200 SMA to indicate the presence of bullish vibes, which suggests that support levels are more likely to hold than to break.
However, Stochastic is still heading south to suggest that sellers are in control for now, and that the correction could keep going until oversold conditions are met.
The Aussie is on weak footing this week mostly due to the RBA‘s surprise decision to keep rates on hold at 4.10% instead of hiking by another 0.25%. Risk-off flows could continue to drag the commodity currency lower, especially if hawkish Fed bets come in play around the NFP release.
Note that the former range spans roughly 250 pips, so the resulting rally could be of at least the same height. Just don’t forget that EUR/AUD moves an average of 150 pips per day, so keep this in mind when setting entries and exits!