EURAUD Analysis The EUR/AUD pair is currently experiencing a significant technical convergence around 1.7530, which represents the 38.2% Fibonacci retracement of the strong uptrend from the 1.5960 low to the multi-month high of 1.8560. This level has been given additional technical weight because it coincides with a potential bearish crossover between the 20-day and 50-day simple moving averages, which could signal a potential change in short-term momentum. Recent price action reflects the formation of a descending channel, which has been forming since the pullback from the key resistance area near 1.8560, confirming that the uptrend is weakening and turning towards consolidation or correction. In terms of dynamics, technical indicators are giving mixed signals, highlighting the current market indecision. The Probability Index has risen significantly and is currently approaching overbought territory, indicating that the recent uptrend is losing momentum and that a downtrend correction is inevitable. Meanwhile, the Relative Strength Index (RSI) is showing modest bullish signals as it attempts to break the neutral 50 level. A successful break above this level would indicate increased risk appetite among investors, potentially paving the way for further upside attempts. If the pair can confidently break the immediate resistance level at 1.7630, the upward momentum will resume, opening the door for a longer-term recovery. The next key barrier lies at 1.7855, which could generate selling pressure as it coincides with the previous consolidation zone. A sustained uptrend could reach the 23.6% Fibonacci retracement level near 1.7940. This zone is likely to become a technical checkpoint reflecting a shallow correction in the overall uptrend, and a break above it would clearly indicate that buyers have regained control. If the uptrend continues to consolidate, the 1.8015 resistance zone could become the next target of interest. This level lies below the previous highs between 1.8450 and 1.8560 and may be difficult to overcome without a catalyst, but a break above this level would confirm a strong return to the previous uptrend. Conversely, if selling pressure returns and the pair fails to hold above 1.7530, the short-term outlook is likely to be bearish. A decline below this level is likely to lead to a larger correction, with immediate support likely at the 50.0% Fibonacci level at 1.7245. A decline to this support area is likely to strengthen the downward momentum. This is particularly important if investor sentiment deteriorates in response to broader macroeconomic developments, including interest rate expectations, risk aversion in global markets, and monetary policy divergence between the European Central Bank and the Reserve Bank of Australia. A prolonged decline could push the pair towards the lower boundary of the descending channel, currently located near 1.7045. This level will become an important technical reference point and may constitute an important area for medium-term forecasts. Despite the current correction structure, the long-term trend for the EUR/AUD pair remains bullish. This is due to the pair remaining above the 200-day simple moving average and moving in a broader upward trend. This suggests that the ongoing sell-off may be part of a healthy consolidation phase rather than a full-blown reversal. A decisive daily close below the 200-day simple moving average could undermine the longer-term bullish outlook and push the market further into a bearish structure. In addition, it is important to consider the broader fundamental context shaping this pair. The divergence in economic conditions between the Eurozone and Australia could be a key factor in the coming sessions. For example, persistent inflationary pressures in the Eurozone could push the European Central Bank to adopt a relatively dovish stance, while slowing inflation and growth in Australia could push the Reserve Bank of Australia to adopt a more cautious or even dovish stance. This divergence could strengthen the euro against the Australian dollar in the medium term, especially if the European Central Bank continues to signal its intention to raise interest rates in the long term, while the Reserve Bank of Australia remains ready to normalize or ease interest rates. In short, the EUR/AUD pair is now at a key technical crossroads. While the long-term uptrend remains intact, the short-term trend appears to be mixed and faces significant resistance near 1.7530. A break above this level would likely restore bullish momentum and set higher targets such as 1.7855, 1.7940, and so on. On the other hand, if current levels are not maintained and the price drops below 1.7245 and possibly below 1.7045, it could signal that the downtrend has regained control. Traders should carefully monitor technical events and macroeconomic indicators. The next breakout is likely to be shaped by a combination of chart patterns and unexpected fundamental factors.
