EUR/AUD Daily Chart
There has been some notable improvement in the EUR/AUD pair since it has moved from 1.2130 to around 1.2920 since Feb 2010. Noteworthy is the fact that this improvement is just beneath 50 percent retracement of a downtrend in the period between Nov.2011 to February 2012. It moved from 1.3805 to about 1.2130. It is also important to note that the 1.2920-1.3015 level indicates support of stagnant prices in the period between July and December 2011 when the support collapsed.
The market is currently bearish with resistance around 1.2920, which creates a divergence with RSI in the chart. This indicates a slowing uptrend and draws speculations for a range-bound market, at least, if not the reverse. The Marketing is still testing a growing trend line since it is now breaking beneath 1.28. Further break beyond this level suggests topping, and the likelihood of a reversal. Right now a break beneath 1.2750 is required in order to end some near-term support along with the increasing trend line.
EUR/AUD 4H Chart
According to 4H chart, a break beneath 1.2770 indicates a break out of a topping pattern. In case the 1.2750 is cleared, it would also do away with the trend line and the 4H 200SMA. And in case this top succeeds a pullback to move back over the 1.28 level will be impossible. Anything beyond 1.2850 suggests that it is time to forget the bearish outlook. Considering the daily trade chart, a break beneath brings forth the 1.2570 pivot. And beneath 1.2550, we get the 1.2130.
The slowdown in China continues to weigh on the Australian dollar, while the Euro remains the main focus especially due to the crisis in Greece.