EURAUD has broken past its descending trend line resistance, signaling that a reversal from the longer-term downtrend could be underway. Price spiked to a high around 1.8170 before pulling back, and the pair is currently trading at 1.7877.

A correction could take place to gather more bullish energy before the next leg higher. The Fibonacci retracement tool shows where more buyers could be waiting to join in.

The 38.2% Fib is at 1.7946, while the 50% level lines up at 1.7877, which is close to the current price action. A larger pullback could reach the 61.8% Fib at 1.7801, which coincides with the broken trend line that could now serve as dynamic support.

The 100 SMA (blue line) is still below the 200 SMA (red line) to indicate that the path of least resistance is to the downside or that there’s a chance the selloff could resume. However, if any of the Fibs are able to keep losses in check, EURAUD could resume the climb to retest the swing high or establish fresh peaks above the 1.81702 handle.

Stochastic is pulling back from the overbought region to reflect a pause in buying momentum. The oscillator has some room to slide before reaching the oversold area, which means that the correction could extend until sellers need a break.

RSI is also retreating from the overbought zone, so price could keep following suit while profit-taking is underway. A bounce off the midpoint, however, could suggest that bullish pressure is picking up once more.

EURAUD could take cues from ECB and RBA policy expectations, as any divergence in central bank stances would influence the pair’s direction. Meanwhile, risk sentiment and commodity price movements remain key factors for the Australian dollar’s performance.

So far, the retreat in gold prices appears to have weighed on the correlated Australian dollar, although resurfacing tariffs uncertainty is also keeping the shared currency on the back foot.