EUR/AUD has declined considerably over the last couple of weeks after it found strong resistance obstacle on the more than three-year top of 1.6350. The price dipped below the simple moving averages (20- and 40-SMA) which are ready to post a bearish crossover soon. It is worth mentioning that the price seems to be in a narrow range over the past two months with upper boundary the 1.6350 high and lower boundary the 1.5980 support.
Turning to the technical picture, the MACD oscillator is falling below the trigger line and is approaching the zero line, while the RSI indicator slipped below the 50 level, indicating losses in the near term.
Should prices decline further, immediate support could be found around the 1.5980 support level, identified by the latest lows on October 1. A close below this level could change the current scenario to bearish and the price could challenge the 1.5730 barrier, which stands marginally above the 23.6% Fibonacci retracement level of the up-leg from 1.3620 to 1.6350.
On the upside, if the pair creates a bullish rally and overcomes the moving averages, the price could meet resistance at 1.6350. Above this level, the next barrier for investors to have in mind is 1.6590, identified by the top on August 2015.
In the long term, the bullish outlook remains intact since February 2017, but in the short-term, the bias is turning more neutral to bearish.
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