Bullish Opportunities Emerge as Price Approaches Support Cluster

Forex

Central Bank

Summary:

With the signal lines sitting just slightly below the neutral zone, a bullish crossover could reveal a market that heavily favors an upward move.

BUY EURAUD

EXP

TRADING

1.64490

Entry Price

1.66300

1.63500

1.64342 -0.00295 -0.18%

0.0

Pips

Flat

1.63500

Exit Price

1.64490

Entry Price

1.66300

Germany recorded an improvement in its trade indicators during May. The Federal Statistical Office reported that the trade surplus increased to EUR 19.1 billion, up from EUR 14.7 billion in April and ahead of the EUR 14.8 billion expected by the market. Concurrently, exports grew by 0.9% monthly, outperforming both the previous 0.8% advance and the 0.3% contraction projected by analysts.

Despite these positive data points, European market attention remains focused on the implications of the rebound in oil prices following the renewed escalation of tensions between the United States and Iran. This scenario has led investors to reinforce their expectations of a more restrictive stance from the European Central Bank (ECB). According to Reuters, markets are pricing in around 30 additional basis points of monetary tightening for the remainder of the year, after the institution increased its rates by 25 basis points in June.

Nonetheless, preliminary Eurozone inflation data showed a larger moderation than anticipated. The Harmonized Index of Consumer Prices (HICP) decelerated to 2.8% year-on-year in June from 3.2% in May, while prices pulled back by 0.1% on a monthly basis.

In this context, ECB Governing Council member José Luis Escrivá pointed out that the institution must keep all monetary policy options open, though he noted that central banks typically avoid reacting to temporary movements in energy prices. For his part, Joachim Nagel highlighted that recent events surrounding Iran have once again increased economic uncertainty, defending a meeting-by-meeting decision-making approach.

In Australia, markets could see an increase in expectations for a more hawkish stance from the Reserve Bank of Australia (RBA). Deputy Governor Sarah Hunter reiterated that the entity stands ready to act if necessary to guarantee the return of inflation to its target and to preserve sustainable conditions of full employment.

However, these expectations have recently moderated due to the slowdown observed in the monthly Consumer Price Index (CPI) over the last two months, leading investors to scale back bets on further monetary tightening in the short term. Bullish Opportunities Emerge as Price Approaches Support Cluster_1

Bullish Opportunities Emerge as Price Approaches Support Cluster_1

Technical Analysis

EURAUD is currently moving within an ascending channel, having established a local peak at the upper boundary when it reached 1.6618 on June 29. Since then, the price has retraced until finding dynamic support around the 100-period moving average, which currently sits at 1.6429, while the 200-period moving average tracks lower within the bullish channel at 1.6344. Around June 18, EURAUD reacted upward upon approaching these levels; if this pattern repeats, we could see a new bullish impulse with a path toward the upper part of the channel near 1.6630. This zone aligns with the 0.618 Fibonacci expansion, acting as the target in the event of a bullish resumption.

Looking at the oscillators, the RSI descended to the 33 level on July 6 as it approached oversold territory and reacted upward. With the lower boundary of the channel nearby, this could point to a bullish resumption if the dynamic supports are well maintained. Meanwhile, the MACD is already displaying a bullish histogram that is not yet building depth rapidly. With the signal lines sitting just slightly below the neutral zone, a bullish crossover could reveal a market that heavily favors an upward move.

Trading Recommendations

Trading direction: Buy

Entry price: 1.6450

Target price: 1.6630

Stop loss: 1.6350

Validity: Jul 22, 2026 15:00:00

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Bullish Opportunities Emerge as Price Approaches Support Cluster

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