EUR/AUD has been trading with the bearish trend recently which appeared as a result of a drastic EUR's fall from 1.6350. The price is expected to move lower in the coming days.

EUR is under pressure amid downbeat statistics from the eurozone. The appointment of Christine Lagarde as the ECB President hints at a continuation of the current soft monetary policy. However, investors don't expect the ECB to cut the key interest rate, awaiting any signs of additional measures to stimulate the eurozone's economy and the renewal of previously suspended courses. Another pain for EUR is the looming trade conflict with the United States and the introduction of duties on European imports. However, in comparison with the AUD, EUR is still stable despite the extensive economic downturn in the EU, including Germany.

Today German ZEW economic sentiment report was published with a decrease to -24.5 from the previous figure of -21.1 which was expected to be at -22.1. Besides, the eurozone's trade balance proficit widened to 20.2B from the previous figure of 15.3B which was expected to be at 16.4B. Tomorrow the eurozone is due to release a final CPI which is expected to show a flat reading of 1.2%.

Despite the pause in the trade conflict between China and the United States, the predictions remain uncertain and investment in commodity currencies is still too risky. The key factor in AUD weakness this month was a rate cut by the Reserve Bank of Australia and its plans to continue with their dovish rhetoric amid external risks. Macroeconomic reports only increase the likelihood of a further cut of the key cash rate. The consumer sentiment index published last week showed a decline of 4.1% in the index to 96.5 points, which is the lowest level for the last two years. Moreover, Australia is due to publish a report on employment change which is expected to decrease from 42.3K to 9.1K while the unemployment rate is expected to be unchanged at 5.2%. Australia's labor market is rapidly adding jobs but that is still not enough to pull the unemployment rate below 5% as more people are looking for work.

Recently the RBA also stated the intention to cut interest rates again, if needed to support employment, wages growth, and inflation. In total, the RBA has already eased monetary policy twice in June and July to a record low of 1%. The minutes of the latest RBA policy meeting read that its board decided that cutting rates by another quarter-point together with a similar move in the previous month would help speed up the economy.

TECHNICAL OVERVIEW:

The price has been quite impulsive with the recent bearish momentum. The pair is expected to reach 1.5900 support area before any strong bullish pressure is observed in the pair. As the preceding trend is bearish and quite a strong one, further momentum on the downside will not be a surprise to market participants. Keeping an eye on 1.5900 will help to take profits out of the market. A break below 1.5900 will lead to further downward pressure in the coming days.