Technically EUR/AUD looks very bearish and after breaking key support around the 1.50 area would now be eyeing the head and shoulders target at 1.4280

Technically EUR/AUD looks very bearish and after breaking key support around the 1.50 area would now be eyeing the head and shoulders target at 1.4280. Given the cross is trading just below 1.4800 now there seems plenty of downside. There is strong horizontal support at 1.4560, where there were a series of failure highs from September and October last year. Fundamentally shorts make sense, although I would not be surprised if we have seen the low point in European inflation (at 0.5%). The pair is oversold at present so I would look for a rally to enter shorts. German industrial production is out at 16:00 and the market expects a slight slowdown in the pace of growth to 0.3% on the month.