EURAUD Testing Major Uptrend Line
21 February 2022
The EURAUD cross traded lower today, despite the risk-off mood in the markets, which usually sends the cross sharply higher.
At the time of writing, the euro was 0.3% weaker against the Aussie, changing hands at one-month lows at 1.5720.
A barrage of negative news came from Russia today after Kremlin spokesman Dmitry Peskov said that "It's premature to talk about any specific plans for organizing any kind of summits" and that there are no "concrete plans" for a summit yet.
Subsequent news that a mortar shell had destroyed a Russian border checkpoint near Rostov - something which Ukraine's military denied doing - did not lift the already downbeat mood, but it was the news that Russia had killed five "saboteurs" who tried to violate its border (and which Ukraine once again slammed as fake news) in an unconfirmed incident that would be the first direct clash with Ukrainian forces.
The price is now testing the significant uptrend line from October and December lows, near 1.6720. If bears push the euro below that level, it could mean the end to the recent medium-term uptrend, with a potential decline toward 1.550.
Alternatively, the upside resistance is expected at the 50-day moving average (the purple line) near 1.5780, followed by the 200-day moving average (the green line) near 1.5840. The selling pressure could continue as long as the euro stays below these averages.