Is EURAUD getting ready to fly?

The EURAUD cross has been consolidating over the previous days, and it seems stuck in a narrow range since July. On Friday, it was trading 0.4% higher during the US session, last seen at around 1.62650.

As this cross is usually negatively correlated to US stocks, it tends to rise in times of distress and decline in risk-on times. US indices appear to be topping out, which could fuel another rally in the EURAUD cross.

The primary resistance seems to be at around 1.6270/80, and if this level is taken out, further bullish momentum could hit the markets, pushing the cross to 1.6340, where the short-term bearish trend line is seen.

Should the euro rise above this trendline, the medium-term trend could change to bullish, targeting the 1.65 level.

Alternatively, if sentiment improves again and the Australian dollar starts to rally, supports might be located near 1.62 and afterward at around 1.6160. If the euro drops below this zone, bears could push the cross back to 1.60.

 
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