• EUR/AUD declined on Monday as China's better-than-feared factory activity data and higher oil prices buoyed Australian dollar
• The rate decision by the Reserve Bank of Australia is the key risk event this week, with markets suspecting policymakers will hold rates steady but a slim majority of economists favouring a hike.
•A close below support at 38.2%fib will give further momentum to bears, opening the way for a run towards 1.6250 level.
• From a technical viewpoint, the moving averages are pointing downwards, while the RSI has turned lower.
• Immediate resistance is located at 1.6422( 14DMA), any close above will push the pair towards 1.6476 ( 50%fib).
• Strong support is seen at 1.6345(38.2%fib) and break below could take the pair towards 1.6287 (July 27th low).
Recommendation: Be on sidelines
