The EUR/AUD cross declined to approximately 1.6285 during the early European session on Monday, pressured by the strengthening Australian Dollar (AUD). The AUD’s momentum comes in response to hawkish comments from Reserve Bank of Australia (RBA) Governor Michele Bullock last week, emphasizing vigilance against upside risks to inflation.
RBA Policy Outlook and Market Focus
The RBA’s statement that the board is “not ruling anything in or out” has heightened anticipation for the release of the RBA Meeting Minutes on Tuesday. Investors are keen to gain further insight into the central bank’s stance on interest rates and inflation management.
Technical Analysis: Bearish Outlook with Neutral Momentum
Support Levels:
The lower limit of the Bollinger Band at 1.6264 acts as immediate support.
A break below could expose the cross to the crucial support zone at 1.6205-1.6200, a psychological level and the low from November 12.
Further declines may target 1.6135, the low recorded on October 18.
Resistance Levels:
The first resistance lies at 1.6317, aligned with the 100-period Exponential Moving Average (EMA).
A move above this level could face the next hurdle at 1.6337, corresponding to the upper Bollinger Band.
If the cross gains sustained buying interest, it could test 1.6430, the low from November 5.
Momentum Indicators:
The 4-hour chart shows the price holding below the 100-period EMA, reinforcing the bearish tone.
The Relative Strength Index (RSI) near the midline indicates neutral momentum, suggesting the possibility of short-term consolidation.
Outlook
The EUR/AUD cross remains under bearish pressure, but consolidation around current levels cannot be ruled out given the neutral RSI reading. Traders will closely monitor Tuesday’s RBA Meeting Minutes for directional cues.
For now, a sustained break of 1.6264 could deepen the bearish move, while recovery above 1.6317 would signal potential for a broader rebound.
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