EUR/AUD declines sharply, touching 38.2% Fibonacci.
EUR/AUD has been underperforming in the past three days, challenging the 38.2% Fibonacci retracement level of the upward wave from 1.5340 to 1.6445 near 1.6025. The pair bounced off the 20-day simple moving average last Wednesday and is ready to complete a bearish crossover within the short-term SMAs.
Short-term momentum indicators are also pointing to a continuation of the bearish bias. However, the RSI is well below the 50-neutral level, heading towards the oversold zone, while the MACD is strengthening its negative movement. Moreover, the price has been developing within the Ichimoku cloud and may find a way to exit from it in the next few sessions.
If the pair continues the bearish move, the next level to have in mind is the long-term ascending trend line near the 50.0% Fibo of 1.5900. A penetration of this line would switch the positive tendency to neutral, hitting the 61.8% Fibonacci region of 1.5765.
Should prices reverse higher and pare previous days’ losses, they would meet resistance at the 20- and 40-SMAs, which overlaps with the 23.6% Fibo of 1.6185. A jump above this significant region would test the 1.6260 level ahead of the five-month high of 1.6445.
In the bigger picture, EUR/AUD has been trading within a rising trend line since December 2018, posting higher highs and higher lower. However, in the short-term view, the pair is likely to test the uptrend line before reversing higher again.
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