The EUR/AUD currency pair is facing difficulty in gaining traction, hovering around 1.6250 during the early European session on Wednesday. The Australian Dollar (AUD), often seen as a proxy for China’s economic performance, is under pressure following the US President-elect Donald Trump’s proposed tariff increases on Chinese goods, which are expected to harm Australia’s export sector, as China is one of its largest trading partners.
Bearish Technical Outlook for EUR/AUD
From a technical standpoint, the bearish outlook for the EUR/AUD cross remains intact. The pair continues to trade below the critical 100-period Exponential Moving Average (EMA) on the 4-hour chart, signaling that downward momentum is still in play. Additionally, the Relative Strength Index (RSI) is holding below the midline at 46.50, further supporting the view that there is potential for more downside in the short term.
Support and Resistance Levels
On the downside, immediate support is seen at the lower boundary of the Bollinger Band near 1.6183, followed by a key support level at 1.6135, the low from October 18. A further drop below this could push the pair toward the psychological 1.6100 level.
To the upside, the pair faces resistance at the upper boundary of the Bollinger Band near 1.6293, with further resistance at the 100-day EMA at 1.6322. Any sustained buying momentum could see the pair testing the 1.6500 round number.
Key Drivers to Watch
Traders will be closely monitoring developments surrounding US-China trade relations and any further commentary from President-elect Trump, as these factors continue to weigh heavily on the AUD. In the near term, the bearish trend for EUR/AUD seems likely to persist, with the potential for further downside if key support levels are breached.
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