EUR/AUD has broken below a layer of technical support located around 1.62 and multiple factors together could drive it lower still over the coming weeks, said RBC Capital Markets strategists, who've tipped the pair as a short.

EUR/AUD was quoted 0.11% lower around 1.6084 at last look on Thursday and was down by around 0.5% for the recent week. RBC strategists tipped the pair as a short from market levels and advocated placing a stop-loss around 1.6250.

"The growing policy divergence between the RBA's 'hawkish hold' and the ECB's easing stance, along with political risks surrounding the upcoming French legislative election, should drive EUR/AUD lower in coming weeks so long as general risk sentiment remains positive," the strategists wrote in a Thursday note to clients.

"Aim for a decline in the cross to the lower bottom of the channel drawn through the August 2023 high and December 2023 low," RBC added, while tipping the pair as a short with a target of 1.5850.