EURAUD has been trending lower on its 1-hour chart, moving below a falling trend line connecting the latest highs of price action. 

The pair just recently sold off upon hitting the trend line resistance then dipped to the 1.5150 minor psychological support before pulling back up.

Using the Fibonacci retracement tool on the latest swing high and low shows that the 61.8% level lines up with the falling trend line and might hold as resistance. This also coincides with a broken short-term support level at 1.5550 that could act as an area of interest.

Stochastic and RSI are both heading up, which means that buyers are in control of price action for now and that the correction is still taking place. Once the technical indicators turn from the overbought zone, euro bears might take over and push price back down to the previous lows or much lower.

Earlier today, Australia printed a weaker than expected CPI reading of 0.5% for Q3 2015 versus the projected 0.7% figure. While the RBA seems to have shifted to a less dovish stance based on their latest policy meeting minutes, the downbeat inflation figures could lead them to revert to a downbeat bias.

However, the euro might be in for more downside since the ECB has already explicitly stated that they are looking into a range of policy tools in case further easing is warranted. A few data points from the region have surprised to the upside but those might not be enough to prevent the ECB from ramping up their stimulus in case the inflation estimates come in negative.

German import prices and their GfK consumer climate index are up for release today, although this might just have a minimal effect on the euro. Australian import prices due on Thursday and flash CPI readings from Germany and Spain also up for release then might have a larger directional impact.

By Kate Curtis from Trader’s Way