EURAUD recently broke down from a descending triangle pattern, with price slipping below the horizontal support that had been holding since late June near the 1.6268 mark.

This breakdown suggests that sellers have gained the upper hand, and a retest of the broken support could be in store before the downtrend gathers further momentum.

The broken triangle floor now lines up closely with the 38.2% Fibonacci retracement level at 1.6268, drawn from the 1.6158 swing low to the 1.6447 swing high. This confluence could act as a strong resistance zone on a bounce, potentially attracting more sellers back into the pair.

A more significant pullback could reach the 50% Fib at 1.6302 or the 61.8% level at 1.6336, which is also close to where the broken triangle trend line and the 200 SMA converge.

The 100 SMA remains below the 200 SMA, confirming that the path of least resistance is still tilted to the downside. Price is also trading below both moving averages, which could continue to serve as dynamic resistance on any recovery attempts.

Stochastic recently emerged from the oversold region and is turning higher, reflecting a short-term return in buying pressure that could fuel the retracement toward the broken support. RSI is exhibiting a similar move, climbing off the oversold zone, though the oscillator still has room to advance before reaching overbought conditions, allowing the corrective bounce to extend a bit further.

If the Fibonacci retracement levels and the former triangle support hold as a ceiling, EURAUD could resume its slide toward the swing low at 1.6158 or lower, as the broader downtrend remains intact.

On the other hand, a break back above these confluence zones could invite a larger correction, potentially challenging the swing high at 1.6447 and delaying the bearish continuation. Earlier today, Australia reported stronger GDP figures for Q2, keeping expectations in play for another RBA hike this month.