EUR/AUD Hovers Near the 1.5835 Zone

EUR/AUD traded lower yesterday, after it hit resistance at 1.5935, and its currently hovering slightly above the key support zone of 1.5835. Since February 4^th, the outlook has been negative, and although the pair failed several times to overcome the 1.5835 zone, it kept forming lower highs. However, in order to start examining further declines, we would like to see a clear dip below that barrier.

Such a dip will confirm a forthcoming lower low and may initially test the 1.5780 territory, marked by the low of February 1^st. If that level is also broken, then we could see the bears diving towards the low of January 26^th, at 1.5715, or the low of January 13^th, at 1.5690. If they are not willing to stop there either, then a break lower could set the stage for declines towards the 1.5565 zone, marked by the lows of December 30^th and 31^st.

Taking a look at our short-term oscillators, we see that the RSI is below 50, but it has ticked up. The MACD, although below both its zero and trigger lines, points sideways. Both indicators detect downside speed, but the fact that the RSI ticked up and that the MACD points sideways, adds to our choice of waiting for a dip below 1.5835 before we get confident on more declines.

In order to abandon the bearish case, we would like to see a strong recovery above the round figure of 1.6000. This could wake up more bulls, who could climb towards the 1.6135 barrier, which is marked by an intraday swing high formed on February 7^th. Another break, above 1.6135, could extend the advance towards the 1.6234 barrier, which is slightly above the peak of February 4^th, and is marked by the peak of September 21^st.

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