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EUR/AUD recovering from early losses; 1.4050/54 resistance under attack

FXStreet (Moscow) - EUR/AUD dipped to the current Asian low at 1.4009 following better than expected Australian employment data, but bullish momentum has waned and the cross has returned to mid-1.4000s.

Heading towards long-term support

EUR/AUD has been following Aussie pattern for some time now. The cross has been growing steadily since the start of the week due to AUD sell-off across the board. Though the situation has changed as strong job report from Australia seems impressive enough to trigger Aussie upside correction from deeply oversold levels. Strong employment numbers might signal tightening in the labour market. Sure hey are not enough to change RBA’s mood as the central bank needs more solid data. Later during the day, keep your eyes peeled for German and French inflation reports as may define EUR dynamics across the board. Weaker data might be more influential in terms of market reaction as it will support the idea that EZ needs more easing from ECB.

What price levels and patterns have to be considered?

Current price is 1.4049, with resistance ahead at 1.4054 (Weekly Classic R1), 1.4091 (Hourly 20 EMA), 1.4109 (Daily Open and Weekly High) and 1.4114 (Daily Classic PP).

Next support to the downside can be found at 1.4044/39 (Yesterday's Low and Daily Classic S1 respectively), 1.4012 (Daily Low), and 1.3969 (Daily Classic S2).

Looking at price patterns, we can see a Doji and Hammer 4-hour candlestick formation.

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