EURAUD took a soft bearish turn after its steep uptrend found strong resistance at an almost eight-month high of 1.5686.
Previously, the pair advanced above June’s high of 1.5396, adding more credence to the two-month-old bull run.
Yet, the technical oscillators currently warn that the ongoing bearish correction may get more legs before the focus shifts to the upside again. Particularly, with the RSI retreating below its 70 overbought mark and the stochastics shifting southwards, the bears may keep leading the market in the near term.
If the price slides below 1.5535, it could test the 1.5400-1.5355 area ahead of the 20-day simple moving average (SMA) around 1.5300. Failure to pivot here may intensify selling activities towards the 38.2% Fibonacci retracement of the 1.4279 -1.5686 upleg at 1.5150.
In the positive scenario, where the price recoups its recent losses and climbs above 1.5685, it could initially encounter the 1.5825 barrier and then challenge the 1.5935 handle.
Summarizing, EURAUD could extend its bearish corrective course in the short term, especially if the immediate 1.5535 constraining zone proves fragile.
