FxWirePro:EUR/AUD extends drop, faces 38.2 %fib support

• EUR/AUD declined on Tuesday as the Australian dollar gained strength on higher commodities price and hawkish meeting by RBA.

• RBA said Tuesday there was no immediate need to change interest rates, keeping them steady for a year, but emphasized the need to remain ready to adjust as the economic outlook evolves

• The latest RBA minutes reinforced the central bank’s hawkish stance, supporting the Australian dollar

• Iron ore futures rose ,reaching a one-week high, supported by a weaker dollar and the start of restocking by Chinese steelmakers to prepare for production in January.

• Technical signals are bearish as RSI has turned sharply lower, daily momentum studies  5, 9 and 1 DMAs are trending down. 

•  Immediate resistance is located at 1.6257(50 %fib), any close above will push the pair towards 1.6312(50%fib)

• Support is seen at 1.6208 (38.2 %fib ) and break below could take the pair towards 1.6133(23.6 %fib).

Recommendation: Good to sell   around 1.6240 , with stop loss of 1.6320 and target price of 1.6170.