2026-01-15 02:48:00
EUR/AUD has been cruising lower inside a descending channel and looks ready to make another pullback to resistance.
Are sellers just waiting to hop in soon?
Take a look at these inflection points on the 4-hour chart!
Strengthening expectations for an RBA interest rate hike appear to be propping up the Australian dollar these days while weak spots in eurozone data are clouding the ECB’s neutral outlook.
At the same time, improvements in risk-taking are providing additional support for the higher-yielding AUD, along with expectations of additional stimulus from China.
Can EUR/AUD sustain its selloff then?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the euro and the Australian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
EUR/AUD has formed lower highs and lower lows connected by a falling channel that’s been holding since mid-October last year.
The pair is in the middle of a pullback to the correction levels marked by the Fibonacci retracement tool, with the 38.2% Fib lining up neatly with a former support zone and the 1.7500 major psychological mark.
A larger correction could still reach the 50% Fib closer to the channel top and R1 (1.7540) or the 61.8% level near the 200 SMA dynamic inflection point. Note that the 100 SMA is below this slower-moving SMA, which suggests that bears have the upper hand.
Keep your eyes peeled for reversal candlesticks at these levels that could point to a continuation of the slide back to the swing low near S1 (1.7280) or to the next bearish target at S2 (1.7160).
On the other hand, long green candles piercing through the channel resistance could hint at a reversal, possibly taking EUR/AUD to the upside targets at R2 (1.7670) then R3 (1.7800).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
