• EUR/AUD declined below 1.6500 level on Monday as upbeat risk sentiment and hawkish comments from Australian dollar.
• On Friday, Australia’s top central banker said it was too early to consider rate cuts, noting that the board is still focused on potential inflationary risks.
• The central bank has maintained its policy stance since November after raising the cash rate by 425 basis points to 4.35% since May 2022, aiming to curb inflation while protecting jobs.
• Technical signals are bearish as RSI is at 47, daily momentum studies 5, 9 and 10 DMAs are trending down.
• Immediate resistance is located at 1.6545(Daily high), any close above will push the pair towards 1.6617 (38.2% fib)
• Strong support is seen at 1.6456(38.2% fib) and break below could take the pair towards 1.6331 (Lower BB).
Recommendation: Good to sell on rally around 1.6490 , with stop loss of 1.6600 and target price of 1.6400
