The Euro (EUR) extended downside movement against the Aussie Dollar (AUD) on Friday, dragging the price of EURAUD to less than 1.4200 following the announcement of monetary policy by the European Central Bank (ECB). The technical bias remains slightly bullish because of a higher high in the recent upside rally on the daily chart.

Technical Analysis

As of this writing, the pair is being traded around 1.4167. A support may be noted near 1.4135, the short term horizontal support ahead of 1.4070, the swing low of the last major downside move and then 1.4000, the psychological number.

On the upside, the pair is expected to face a hurdle near 1.4186, the horizontal resistance area ahead of 1.4209, the trendline resistance and then 1.4512, the swing high of the last major upside rally. The technical bias shall remain bullish as long as the 1.4070 support area is intact.

ECB Monetary Policy

The European Central Bank has extended its bond buying programme until the end of 2017, as Mario Draghi insisted there was “no question” of ECB tapering even as monthly purchases were cut by a quarter. The ECB president revealed a split among policymakers over the central bank’s decision to extend quantitative easing but reduce monthly purchases to €60bn next April from €80bn. Markets and analysts had expected purchases to continue at €80bn until next September. Mr Draghi said buying bonds with yields below this level remained an “option” rather than a “necessity”.

Trade Idea

Considering the overall technical and fundamental outlook, selling the pair on short term upside moves near the above mentioned trendline resistance can be a good strategy