Time Zone: GMT +2
Time Frame: 4 Hours (H4)
Fundamental Analysis
The EUR/AUD currency pair tracks the exchange rate between the Euro (EUR) and the Australian Dollar (AUD). On November 5, 2024, attention is centered on economic developments from both regions. For the Australian dollar, traders are eyeing the Reserve Bank of Australia’s (RBA) latest interest rate announcement and subsequent policy statement. The market will be looking for any indications of future rate hikes or adjustments based on the RBA’s economic outlook. Meanwhile, the Euro is influenced by economic releases such as the French Treasury budget results and industrial output data, which will shed light on the strength of the Eurozone’s economy. Investors will also focus on any remarks from European officials, particularly regarding inflation and fiscal policy, which could sway the market’s expectations for upcoming monetary decisions.
Price Action
On the H4 chart, EUR AUD has exhibited a bullish trend in recent weeks. However, this trend appears to be reversing as the latest candles show increased bearish activity. The price has broken below the 23.6% Fibonacci retracement level and is heading towards the 38.2% level, signaling a potential deeper correction. Although there have been a few bullish candles, the overall sentiment remains bearish, with traders closely monitoring whether the pair will find support or continue declining.
Key Technical Indicators
Ichimoku Cloud: The price is currently positioned above the Ichimoku Cloud but is gradually moving downward. If the price breaks into the cloud, it may confirm a bearish shift, but staying above it could suggest underlying support.
MACD (Moving Average Convergence Divergence): The MACD line is approaching the signal line from above, indicating weakening bullish momentum. The shrinking histogram supports a bearish outlook, and a potential bearish crossover would further confirm downward pressure.
%R (Williams %R): The %R indicator is nearing oversold territory, suggesting that the downtrend may be overextended. However, there are no clear reversal signals yet, so caution is advised.
Parabolic SAR: The Parabolic SAR dots are located above the price candles, confirming a bearish trend. This indicator suggests continued downward movement unless a strong bullish reversal develops.
Support and Resistance Levels
Support: Key support is at 1.6370, aligning with the 38.2% Fibonacci retracement level. A break below this level could accelerate the bearish trend.
Resistance: Initial resistance is at 1.6530, near the 23.6% Fibonacci level, with stronger resistance at 1.6645.
Conclusion and Consideration
The EUR/AUD H4 analysis indicates a likely continuation of the bearish trend, highlighted by signals from the Ichimoku Cloud, Parabolic SAR, and a weakening MACD. Key support at 1.6370 will be critical, and a break below it could signal further declines. The RBA’s interest rate announcement and economic projections will be pivotal for AUD movements, while Eurozone data will affect EUR sentiment. Traders should exercise caution and employ proper risk management strategies, given the potential for increased volatility following these major news events.
Disclaimer: The analysis provided for EUR/AUD is for informational purposes only and does not constitute investment advice. Traders are encouraged to perform their own analysis and research before making any trading decisions on EURAUD. Market conditions can change quickly, so staying informed with the latest data is essential.
