Hello traders! During past two weeks, the EUR/AUD has been slowly reversing to the downside. Price has established a double top near 1.6546 level and slowly but steadily started to move lower.
Each new wave resulting in a new lower low, which validates the downtrend. EUR/AUD broke below the ascending channel and on the corrective move up approached the demand zone near 1.6430. The 50 Exponential Moving Average was rejected cleanly and current price might be the price of interest for the sellers. But this can only be the case as long as EUR/AUD hourly close remains below the 1.6440.
The downside target is seen at 1.6165, which is confirmed by two Fibonacci retracement levels. First is the 327.2% Fibs applied to the corrective wave up after the break below the 1.6431 supply/demand zone. The second is 88.6% Fibs applied to the overall upside move which can be seen on the chart.
All-in-all, as long as current resistance holds, price should be expected to decline by approximately 250, and based on the lower trendline of the descending channel, the downside target could be reached as soon as August 18.
Bias: Strongly bearish while below 1.6431
Potential Resistance Zone: 1.6430 – 1.6400
Potential Targets: 1.6166
Have a profitable trading!