Key Points
- The Euro traded below an important support of 1.5170 against the Aussie Dollar to initiate a downside move.
- There was a bullish trend line break noted at 1.5185 on the hourly chart of EURAUD.
- Today in the Euro Zone, the PMI service for May 2017 was released by the Markit Economics.
- The outcome was above the forecast, as the PMI service rose to 56.3 from 56.2.
EURAUD Technical Analysis
The Euro traded nicely above the 1.5200 level against the Aussie Dollar, but later failed to break the 1.5225 resistance area, and started a decline. The EURAUD pair broke the 1.5200 support and the 21 hourly simple moving average to initiate the downside move.
During the downside move, the pair also broke the 23.6% Fib retracement level of the last wave from the 1.4943 low to 1.5227 high, and the 1.5080 support.
The pair is likely to continue lower, and may soon test the 61.8% Fib retracement level of the last wave from the 1.4943 low to 1.5227 high at 1.5050. Below 1.5050, the 1.5000 handle could be tested.
Euro Zone Services PMI
Recently in the Euro Zone, the PMI service for May 2017 was released by the Markit Economics. The market was positioned for no change in the PMI from the last reading of 56.2 in May 2017.
The result was above the forecast, as the PMI service rose to 56.3 from 56.2. On the other hand, the German Services PMI posted no change from 55.2 in May 2017. The Euro Zone PMI report stated that “Optimism about the one-year outlook for output rose to its highest level since data for this series were first collected in July 2012. Strong new order inflows tested capacity, leading to rising volumes of outstanding business“.
Overall, the EURAUD pair may correct a few pips higher, but most likely to face sellers near the 1.5125 resistance.
