EURAUD recently broke below its ascending channel on the 1-hour time frame and might be due for a pullback before heading further south.

Applying the Fib tool on the latest swing high and low shows that the 61.8% level is closest to the broken support but that the 50% Fib already appears to be keeping gains in check.

This retracement level lines up with the moving averages, which usually hold as dynamic inflection points. The 100 SMA is gearing up for a downward crossover, possibly drawing more sellers to the mix and pushing for a move to the swing low at the 1.3900 mark.

Stochastic is turning lower to show that sellers are regaining control of price action. In that case, EURAUD could break below the previous lows and head further south to the next areas of interest closer to 1.3800.

After giving up some ground on election-related uncertainty, the euro regained its footing on upbeat remarks from a couple of ECB policymakers. For Nowotny, the central bank might consider increasing the deposit rate before making adjustments to the benchmark rate and asset purchases. Meanwhile, Praet acknowledged the recent improvements in the economy but clarified that the ECB might not be ready to reduce easing yet.

As for the Australian dollar, jobs data from the Land Down Under fell short of estimates. The employment change figure showed a 6.4K drop in hiring for February while the unemployment rate rose from 5.7% to 5.9%. There are no major reports from both Australia and the euro zone today so market sentiment and political headlines could push this pair around.

By Kate Curtis from Trader’s Way