EURAUD Breakout UnderwayThe recent breakout trade in EURAUD issued last week has now hit its target at 1.6163 following a sharp move higher across recent days. EUR has seen a stark shift in sentiment following a hawkish surprise at the February ECB meeting last week which saw ECB governor Lagarde altering her language around rate hikes and acknowledging a stark shift in the inflation outlook for the eurozone. The ECB had previously been staunchly opposed to the idea of rate hikes this year. However, on the back of the meeting which saw Lagarde softening her tone around potential hikes, market pricing for an ECB hike has shot up, taking EUR higher with it. Given how subdued sentiment was among EUR trades, this surprise has created a seismic shift in markets which looks set to continue to support EUR near term.Technical ViewsEURAUDThe breakout above 1.5876 has seen the market expanding above the contracting triangle pattern. Price has now hit the target at 1.6163 and is seeing some retracement. However, with the retail market heavily short and with both MACD and RSI turned higher here, the focus is on further upside while price holds above the broken triangle top. Above here, the next levels to monitor are 1.6248 and 1.6419.
Source: Tickmill
