EURAUD has been trending higher on its 1-hour chart and is moving inside an ascending channel.

Price seems to be gearing up for a test of support around the 1.5600 handle and technical indicators are signaling that a bounce would take place. 

The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. The 200 SMA is also in line with the channel support, adding to its strength as a floor. 

Stochastic is starting to pull up from the oversold area to signal a return in bullish momentum. In that case, EURAUD could make its way back up to the resistance near the 1.5800 major psychological level. 

Data from Australia has been mostly weaker than expected so far this week, with quarterly company operating profits down 0.2% versus the projected 0.3% uptick. The MI inflation gauge is down from 0.3% to 0.2% while ANZ job advertisements rose another 1.5%.

Last week’s set of reports from the euro zone have been mixed but some have fallen short of estimates. For instance, headline and core flash CPI readings printed gains but were a notch short of the consensus. German retail sales and French consumer spending were also weaker than expected. 

The Spanish unemployment change report and region’s Sentix investor confidence index are up for release today, and stronger than expected reports could revive the shared currency’s strength. Australia has retail sales, the RBA statement, GDP, and trade balance all due this week.

By Kate Curtis from Trader’s Way