EURAUD lost more than 500 pips after touching a more than three-year high on October 11. Earlier on Thursday, it hit a two-month low of 1.5821.
The Tenkan- and Kijun-sen lines are negatively aligned in support of a bearish short-term bias; it should be kept in mind though that the Chikou Span may be signaling a market that is close to oversold.
Steeper losses may meet immediate support around 1.5813, the 50% Fibonacci retracement level of the upleg from 1.5272 to 1.6356. Further below, the 38.2% Fibonacci mark at 1.5685 would increasingly come in focus, while it bears mention that the recent double top formation is projecting potential losses towards roughly the 1.56 handle.
Should the pair reverse course, resistance could occur around the 61.8% Fibonacci level at 1.5942, which is where the 100-day moving average line and the Ichimoku cloud bottom approximately lie as well. This, given that the area around 1.59, which captures a couple of tops from previous months, is broken first. More bullish movement would bring the zone around the Tenkan-sen at 1.6035 increasingly into scope.
The medium-term outlook is looking predominantly bearish, with trading activity taking place below the 50- and 100-day moving average lines, as well as below the Ichimoku cloud.
Overall, both the short- and medium-term pictures are currently looking mostly negative.
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