Natixis sees further downside potential in EUR/AUD cross

Natixis FX Trends Daily note details the bearish technical set up on the EUR/AUD cross.

Key points

The increase in the daily volatility and the sell signals on the daily indicators suggest further downside potential for the cross. The bearish weekly indicators also underline downside risks in the coming days.

Against this backdrop, rallies should be short lived and we expect the EURAUD to retreat to 1.3930 (monthly Bollinger lower band) ahead of targeting a support at 1.3783 (quarterly parabolic and declining trendline). The break below this last level would unleash added downside potential to 1.3590 (Fibonacci extension) and 1.3440 (declining trendline). The resistances are at 1.4060-1.4080, at 1.4250, at 1.4352,  at 1.4520 and at 1.4620.