EUR/AUD Price Forecast: Bears have the upper hand; positive move could get sold into

• EUR/AUD gains some positive traction, though the bias seems tilted in favor of bearish traders.
• Worries about a fresh US-China trade war could undermine the Aussie and cap any further gains.
• A 'Death Cross' formation supports prospects for the emergence of fresh selling at higher levels.

The EUR/AUD cross attracts some buyers during the Asian session on Tuesday and reverses a part of the previous day's slide, though it lacks bullish conviction. Spot prices currently trade around the 1.6235-1.6240 region, up less than 0.20% for the day as traders now look to German macro data - the final CPI print and ZEW Economic Sentiment. 

In the meantime, the Australian Dollar (AUD) continues with its relative underperformance amid worries that US President-elect Donald Trump's protectionist stances could trigger a fresh US-China trade war. This, to a larger extent, overshadows the Reserve Bank of Australia's (RBA) hawkish stance and continues to undermine the China-proxy Aussie, offering some support to the EUR/AUD cross. 

Meanwhile, Trump warned before the election that the European Union would have to pay a big price for not buying enough American exports. This, in turn, could strain the Eurozone's export sector and potentially impact economic growth. Apart from this, a bullish US Dollar (USD) continues to exert some downward pressure on the shared currency and should keep a lid on the EUR/AUD cross. 

From a technical perspective, the formation of 'Death Cross' - the 50-day Simple Moving Average (SMA) crossing below the 200-day SMA - further warrants caution for bullish traders. Moreover, oscillators on the daily chart have been gaining negative traction and are still away from being in the oversold zone, suggesting that the path of least resistance for the EUR/AUD cross is to the downside. 

Hence, any subsequent move-up might continue to attract fresh sellers ahead of the 1.6300 round figure. This, in turn, should cap spot prices near the 50-day SMA, currently pegged near the 1.6325 region. A sustained strength beyond, however, could lift the EUR/AUD cross back towards the 1.6400 mark, or the 200-day SMA, which should now act as a key pivotal point for short-term traders. 

On the flip side, the 1.6200 round figure, closely followed by the 1.6180 horizontal zone might continue to protect the immediate downside. A convincing break below will reaffirm the negative bias and make the EUR/AUD cross vulnerable to weaken below the 1.6150-1.6145 support, towards the 1.6110-1.6100 area en route to the 1.6060-1.6050 region and the October low, around the 1.6000 psychological mark.

EUR/AUD daily chart