EUR/AUD traded higher yesterday, after it hit support at 1.5903 on Wednesday. However, today, it hit resistance at the round figure of 1.6000, near the prior upside support line drawn from the low of July 6, and then, it slid again. As long as the rate remains below that upside line, we see decent chances for the bears to take charge again and push the action lower.
However, in order to get more confident on that front, we would like to see a dip below 1.5875, a support marked by the low of July 16. This will confirm a forthcoming lower low on the 4-hour chart and may pave the way towards the low of July 14, at 1.5775, the break of which could extend the fall towards the low of July 7, at 1.5705.
Turning attention to our short-term oscillators, we see that the RSI, already below 50, has turned down again, while the MACD lies below both its zero and trigger lines. Both indicators suggest that the rate may have started gaining downside speed again, which is inline with the view of seeing some further declines in the short run.
On the upside, we would like to see EUR/AUD recovering back above 1.6055 before we start examining whether the bulls have gained the upper hand. This will signal the return back above the aforementioned upside support line and may open the path towards the peak of July 21, at 1.6130. If the bulls are not willing to stop there, then we may see them climbing towards the 1.62130 territory, defined as a resistance by the high of Dec. 22.