EUR/AUD: Bullish Engulfing Pattern Signals Potential Reversal

FXOpen

EUR/AUD halted downside movement yesterday and closed with a bullish engulfing pattern, indicating strong upside potential in the near future. The sentiment however remains bearish due to Lower Low in the recent move.

Technical Analysis

As of this writing, the pair is being traded near 1.4672. A hurdle can be seen around 1.4730, the 61.8% fib level ahead of 1.4940 that is the 50% fib level. A daily closing above 1.4940 could incite renewed buying interest, exposing rallies above the 15000 handle.

euraud-d1-

On the downside, the pair is expected to find a support near 1.4470 that is the 76.4% fib level ahead of 1.4050 which is the swing low of the previous wave as demonstrated in the following chart.

Consumer Price Index

The Consumer Price Index (CPI)—a main gauge for inflation—increased across the Eurozone by 0.7% during April as compared to 0.5% increase in the same month of the year before, a report by the EuroStat revealed on Thursday; the CPI figure was in line with the median projection of analysts.

Moreover, the Core CPI—a more accurate gauge for inflation—increased by 1.0% during April compared with 0.7% in the same month of the year before, up beating the average forecast of 0.7% increase. Generally speaking, higher CPI figures are considered positive for the economy and vice versa.

Eurozone Growth

The Eurozone grew at just 0.2% during the first quarter of the ongoing year as compared to the same growth in the quarter before, down beating the average forecast of 0.4% growth. Similarly, the growth remained 0.9% in the first quarter as compared to 0.5% growth in the same quarter of the year before, again down beating the average forecast of 1.1%. Generally speaking, higher growth is considered positive for the economy and vice versa.

Conclusion

Considering the recent bullish momentum in the Euro, buying the pair around the current levels could be a good strategy. The stop should be placed at the swing low of the yesterday bar.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Commodities and European currencies Test Key Supports EUR/USD Analysis: The Price Today Has Set Its Minimum Since the Beginning of March Market Analysis: GBP/USD Dives While USD/CAD Gains Bullish Pace The US Currency Corrects After Recent Growth USD/JPY Price Analysis: Consolidation ahead of US News

Latest articles

Commodities

Market Analysis: Gold Price and Crude Oil Price Gain Bullish Momentum

Gold price started a steady increase above the $2,200 resistance level. Crude oil prices are gaining bullish momentum and might rise toward $85.00.

Important Takeaways for Gold and Oil Prices Analysis Today

· Gold price started a decent increase

How Do Grid Trading Strategies Work?
Trader’s Tools

How Do Grid Trading Strategies Work?

Grid trading stands as a distinctive strategy within the trading realm, offering a structured approach to navigating market volatility. By strategically placing buy and sell orders at predefined intervals, this method eschews the need to determine the market direction, instead

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold
Financial Market News

Weekly Market Wrap With Gary Thomson: NIKKEI-225, USD/JPY, GBP/USD, USD/CAD, Gold

Get the latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of  FXOpen UK, as he breaks down the most significant news reports and shares his expert insights.

  • NIKKEI-225 Analysis Indicates Possibility

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65.68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.