• EUR/AUD fell on Tuesday as the Reserve Bank of Australia's hawkish rate cut pressured the pair.
• The Reserve Bank of Australia (RBA) cut the cash rate by 0.25% to 4.1% at its February meeting, marking the first reduction since November 2020.
• Markets expected a 0.25% cut after core inflation dropped to 3.2% in Q4. Swaps show only an 18% chance of another cut in April, but a May move is nearly fully priced in.
• Technical signals are bearish as RSI is heading down at 42, daily momentum studies 5, 9 and 11 DMAs are trending down.
• Immediate resistance is at 1.6536 (38.2% fib), with a close above potentially pushing the pair to 1.6580 (Feb 14th high).
• Support is at 1.6435 (38.2% fib), and a break below could push the pair towards 1.6354 (Lower BB).
Recommendation: Good to sell around 1.6460, with stop loss of 1.6550 and target price of 1.6380
