EURAUD drops below significant support

As sentiment improved, the Aussie has been bid, and the EURAUD cross is now seen at three-month lows, trading at around 1.6500.

The cross has been forming a large triangle pattern, which was broken to the downside. That confirmed the bearish bias on this cross. As long as EURAUD trades below 1.6540, the short and medium-term outlooks seem bearish.

If the price continues lower, the next target for bears could be at 1.6250 and afterward at February' lows near 1.6080. It looks like equities will soon reach their all-time highs, which might support the Australian dollar. 

Alternatively, the mentioned breakdown below the support of 1.6540 could still be a false one. If any rallies are started, the first selling zone should be near the May's bearish trend line, which is currently at around 1.6660. Should the price climb above this level, the short-term outlook might turn back to bullish.

It is hard to see the euro strengthening significantly, considering the problems the EU is now facing. Therefore, rallies could be sold, especially if stock markets will continue to their all-time highs. 
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