EUR/AUD bears eye break beneath 1.6340Euro / Australian DollarFOREXCOM:EURAUDFOREXcomEUR/AUD looks heavy on the charts, sitting just above support at 1.6340. With headwinds from energy security concerns and a negative terms-of-trade shock strengthening for the euro, the risk of a downside break grows ahead of the RBA decision later today. If the pair breaks beneath 1.6340 support and holds there, shorts could be set with a tight stop above the level for protection, targeting 1.6260, where the pair bottomed in July. Beyond that, a break of 1.6260 would open the door for a retest of 1.6164, where the price has bottomed and bounced on multiple occasions going back several years. The message from the oscillators at this point is neutral. RSI (14) has been setting sequentially lower highs and now sits marginally below the neutral 50 level. MACD has also turned negative and is on the cusp of a bearish crossover. But neither indicator is providing a strong steer, placing more emphasis on price action. On the RBA, while it’s very unlikely we’ll see the cash rate moved today with futures putting the probability at just 3.5%, it’s very likely the Bank will retain a hawkish bias, warning of the need to potentially raise interest rates further to bring inflation back to acceptable levels. Also look out for hawkish upgrades in relation to household spending, which has been very solid in recent months, despite headwinds from higher borrowing costs and declining house prices. The RBA has made it clear that unless Australia sees a sharp pickup in productivity, domestic demand will need to slow to stymie inflationary pressures with current policy settings. Good luck! DS