EURAUD has been extending its losses over the last couple of days, following the pullback on the 1.7180 resistance level, which lies near the short-term descending trend line. Currently, the price is trading not far below the 20- and 40-period simple moving averages (SMAs) and holds within the Ichimoku cloud in the 4-hour chart.
The MACD turned lower after the decrease below the trigger line. The bias also looks bearish as indicated by the stochastics: the %K and %D lines are negatively aligned and are both moving further down.
Should bearish dynamics dominate, the market might revisit the two-month low of 1.6545 before meeting 1.6455 the inside swing high from February 2. Below that, the area around 1.6080, which halted downside correction several times in the past, could be another potential barrier to draw focus.
Alternatively, if the price manages to move above the SMAs, nearby resistance could come from the falling trend line around 1.7050. More advances could send prices towards the 1.7180 barrier and the 23.6% Fibonaccci retracement level of the down leg from 1.9800 to 1.6545 at 1.7310. A close above the latter would increase speculation that a neutral mode is in progress touching the 1.7757 hurdle.
In the medium-term picture, the downfall from 1.9800 is still active and hence the outlook remains negative. The 20-period SMA looks to be turning lower to re-visit the 40-period SMA, hinting that the downward pattern might hold for longer.
