FxWirePro:EUR/AUD slips to three week with plenty more downside potential

• EUR/AUD declined on Tuesday   as improved risk sentiment as optimism over a potential U.S.–China trade deal lifted commodity-linked Australian dollar ahead of Australian CPI data.

•   Australia is set to release its latest inflation data on Wednesday, a key report that could provide insight into price pressures across the economy and influence the Reserve Bank of Australia’s (RBA) policy outlook.

• Australia’s Q3 trimmed mean CPI is expected to rise 0.8% quarter-on-quarter while remaining steady at 2.7% year-on-year.

• Market odds of a 25-basis-point rate cut at the RBA’s November 4 meeting have slipped to around 40%, down from 60% earlier Monday, with a full cut still anticipated by February

•  Technical signals are bearish as RSI is heading down  at 42, daily momentum studies 11, 14 and 21 DMAs are trending down. 

•   Immediate resistance is located at 1.7810 (SMA 20), any close above will push the pair towards 1.7858(50 %fib)

• Strong support is seen at 1.7596(38.2 %fib ) and break below could take the pair towards 1.7555(Lower BB).

Recommendation: Good to sell on rally around 1.7720, with stop loss of 1.7800 and target price of 1.7620.