EUR/AUD Price Forecast: Possibility that new up leg is unfolding within range

EUR/AUD could be forming a new up leg after bottoming at the start of the month.
It has formed various reversal patterns and signals that point to a likely extension higher.

Joaquin Monfort FXStreet

EUR/AUD bottomed out at 1.6000 and started rising last week, recovering back up to the 1.6300s before pulling back to where it is currently consolidating in the 1.62s.

EUR/AUD Daily Chart

It is possible this is the start of a new leg higher within a long-term range that stretches from a floor at about 1.6000 and a sloping ceiling currently in the 1.65s. If so, then prices will probably continue higher.

A break above Tuesday’s high of 1.6354 would likely indicate a continuation to the red 50-day Simple Moving Average (SMA) at 1.6433. A break above that, would probably lead to a move up to the top of the range at around 1.6550.

The blue Moving Average Convergence Divergence (MACD) momentum indicator has crossed above its red signal line, giving a buy signal and adding to the bullish evidence.

EUR/AUD formed a bullish Three White Soldiers Japanese candlestick pattern after the October 3 bottom (green shaded rectangle on chart), indicating a possible reversal of the short-term trend. This occurs after a downtrend when three up days form consecutively.

Although the pair formed a bearish Shooting Star candlestick on Tuesday after the market peaked and then fell back down to near its open, the day ended green and not red lessening its bearish significance. It was also not followed by a down day immediately after which would have given added bearish confirmation (red-shaded rectangle on chart).

Author

Joaquin Monfort

FXStreet

Joaquin Monfort is a financial writer and analyst with over 10 years experience writing about financial markets and alt data. He holds a degree in Anthropology from London University and a Diploma in Technical analysis.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold hangs near one-week low; looks to FOMC Minutes for fresh impetus

Gold is consolidating just above the $4,850 level, having touched a one-week low on Tuesday, amid mixed cues. Signs of progress in US–Iran talks dent demand for the traditional safe-haven bullion. Meanwhile, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders also seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.