EUR/AUD continues to slide since the reversal to downside seen on the 11th of October. This also led to a break of the short-term tentative upside support line, taken from the low of the 20th of August. But what’s more important is that the pair has formed a double top on a short-term picture, with the peaks positioned on the 5th and the 11th October. By breaking the above-mentioned upside line, EUR/AUD also broke the so called “neckline” of the double top pattern. This makes us think that we could see some more weakness in the upcoming days.
For now, we will aim for lower levels, but in order to get more comfortable with the downside, a good break below the 1.6095 zone could attract more bears, who could push EUR/AUD even lower. The next potential area of support could be seen around 1.6050, which acted as good support throughout the whole month of September. If the bears remain strong, the next possible support zone could be near 1.5980, marked by the low of the 2nd of October.
Both, the RSI and MACD are showing signs of slowing momentum. The RSI is below 50 and pointing to the downside. The MACD is well below zero, also below the trigger line and continues to face south. Hence, both indicators are currently in support of the above-discussed scenario.
Alternatively, if suddenly EUR/AUD makes a 180-degree move, breaks above the upside support line and closes the day above the 1.6180 level, this is where it could become interesting again for the bulls. More of them could start joining in and potentially lifting the pair towards the 1.6285 hurdle, which held the rate down on the 16th of October. If that resistance hurdle is not able to withstand the pressure from the bulls, a further acceleration of the rate could lead to a test of the 1.6355 barrier, marked by the high of the 11th of September and the peaks of the 5th and the 11th of October.
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