EUR/AUD Price Analysis — October 29

EUR/AUD Price Analysis — October 29

The EUR/AUD traded on a slightly bearish bias in the early European session on Thursday, following a spike to the upside yesterday despite the weakness in the EUR.

For several days now, conditions have been tough for the commodity industry for which the AUD trades as a proxy, causing it to slide despite renewed COVID-19 worries in the eurozone.

France released an official statement yesterday, stating that the country will be going back into a nationwide lockdown from this week.

Meanwhile, Copper was down by about 0.5% and the West Texas Intermediate shaved off 4.2% overnight, causing the CRB index to slide by about 2.6% at the close of market yesterday. This gloomy performance in the commodities market extended additional weakness to the Aussie.

In other news, the annual print remained unchanged from the previous quarter’s mark of 1.2% and remained below the RBA’s 2-3% target range. While this data has little effect on next week’s RBA meeting, where the bank is expected to become more dovish in its monetary policy, it all goes in the mix.

Moving on, investors will be focusing on the ECB policy meeting scheduled for later today, which is expected to some of these increasing market risks. Many forecasters expect the ECB Chair, Christine Lagarde, to strike a dovish tone today.

EUR/AUD – 4-Hour Chart

EUR/AUD Value Forecast — October 29

EUR/AUD Major Bias: Sideways

Supply Levels: 1.6700, 1.6800, and 1.6900

Demand Levels: 1.6567, 1.6512, and 1.6400

The EUR/AUD appears to be gaining some bullish momentum following last week’s bearish rally. The pair found strong support at the base of our ascending channel, indicating that bulls have entered the market. That said, we expect the 1.6567 strong support to hold in the meantime as the EUR/AUD aims for the upper-1.6800 level (the top of our channel).

However, given the weakness present in both currencies, it could take several days before this is achieved.

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EUR/AUD Price Analysis — October 22

EUR/AUD Price Analysis — October 22

The EUR/AUD traded through the European session on Thursday with a sideways bias, as the global markets’ risk mood gets a lift, and the ECB likely to leave its policy unchanged. Meanwhile, the rising numbers of COVID-19 infections and lockdown restrictions on the continent should thwart any significant gains in the EUR in the coming days. 

Although ECB members assured in their last meeting that there would be no changes to the bank’s policy in the near-term, worries over the rising Coronavirus infection in the Eurozone have caused investors to go into panic mode.

The pandemic remains the major focus for policymakers in the region. However, this week was a huge success for the EU’s first issuance of SURE (Support to mitigate Unemployment Risks in an Emergency) bonds. This bond release is regarded as the largest EUR sustainable bond issue and has extended additional support to the EUR. 

Meanwhile, the EUR may be benefiting from the growing global risk appetite, as a US stimulus package becomes increasingly possible and Brexit talks between the UK and EU progresses.

In other news, the AUD remains under pressure as the RBA prepares for a major policy change in November. The bank has stated that a lower A$ would be a beneficial by-product for the country. That said, investors can expect a weaker AUD in the coming days and weeks.

EUR/AUD – 4-Hour Chart

EUR/AUD Value Forecast — October 22

EUR/AUD Major Bias: Sideways

Supply Levels: 1.6700, 1.6800, and 1.6900

Demand Levels: 1.6567, 1.6512, and 1.6400

The EUR/AUD has now come under fresh bearish pressure following a strong bullish performance two days ago. The pair broke above a long-prevailing resistance level at 1.6567 and went on to challenge higher levels. However, the forex pair was met with renewed resistance at the 1.6800 psychological line. 

Meanwhile, the EUR/AUD is currently trading within a month-old channel and we could see further downsides (retrace) in the near-term.

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EUR/AUD Price Analysis — October 15

EUR/AUD Price Analysis — October 15

The EUR/AUD trades on a very bullish sentiment in the European session on Thursday, as the AUD continues to suffer several bouts of weakness. Meanwhile, the EUR is also under intense pressure amid several fundamental factors. 

The economic backlashes of the pandemic continue to ravage the euro, as the Eurozone is now under threat of a second wave of the virus, which could further impede economic recovery. While France and Ireland execute additional lockdown measures as COVID-19 cases surge, German Chancellor Angela Merkel has cautioned that Germany cannot “afford” another lockdown. 

Meanwhile, Brexit negotiations are underway in a two-day summit in Brussels, following Boris Johnson’s comments that today would be the last day for a possible deal. That said, a decision should be finalized by the end of the week, which could drive additional volatility for the EUR. 

In other news, the Aussie continues on its spiral following dovish comments from the RBA Governor Philip Lowe, which proposes interest rate cuts in early November. Furthermore, an increase in the country’s unemployment rate to 6.9% last month bolstered the bearishness in the AUD. 

EURAUD – Daily Chart

EUR/AUD Value Forecast — October 15

EUR/AUD Major Bias: Bullish

Supply Levels: 1.6567, 1.6700, and 1.6800

Demand Levels: 1.6512, 1.6400, and 1.6330

The EUR/AUD took a bullish turn yesterday after it revisited the 1.6330 support. The bullish rally today was further aided by the renewed weakness in the AUD. However, bulls were unable to break the crucial 1.6567 resistance, which represents the top of the wide range within which this pair has been trading since June 2019. The trading range is between 1.6567 and 1.6100. 

If bears succeed in breaking this level, we could see another intense bull rally. However, the EUR/AUD has now stalled below that level for several hours, indicating that bears are losing strength. 

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EUR/AUD Price Analysis — October 8

EUR/AUD Price Analysis — October 8

The price action surrounding the EUR/AUD continued on its back-and-forth sentiment on Thursday, as the global markets continue to experience a deficit of volatility or market-moving events.

Meanwhile, the publication of ECB’s Accounts indicated that the recent appreciation of the exchange rate did not go unnoticed by members of the Governing Council. The Accounts reported that interest rate cuts and adjustments to the Targeted Long Term Repo Operations (TLTROs) conditions are still on the bank’s arsenal. The Accounts also reported a strong consensus among members of the central bank that substantial stimulus remained a necessity.

On another front, the remaining strength in the euro (EUR) continues to be underpinned by promising results from domestic fundamentals (which have also been bolstering a strong economic recovery for Europe following the pandemic-induced slump in the spring) like the reluctant stance from the ECB and the solid position of the EMU’s current account.

In other news, a recent better-than-expected data release from Australia showed that the ANZ Business Confidence in this month increased to -14.5 from -28-5 in September. Furthermore, the ANZ Activity Outlook spiked from -5.4% to 3.6% and has bolstered the strength of the Aussie (AUD) against its rival currencies.

EURAUD – Hourly Chart

EUR/AUD Value Forecast — October 8

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6512, 1.6567, and 1.6700

Demand Levels: 1.6300, 1.6200, and 1.6100

The EUR/AUD is currently under heavy sell pressure considering the recent EUR weakness. At press time, the pair is trading at 1.6409, after failing to break the 1.6512 resistance on several attempts. Following its fall from the 1.6512 resistance, the EUR/AUD has found strong support at the 1.6400 line.

We expect a retest and break below this support in the coming hours, as the AUD remains well-supported by some fundamental factors.

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EUR/AUD Price Analysis — October 1

EUR/AUD Price Analysis — October 1

The EUR/AUD has traded through the week under some bearish pressure since it hit the key resistance at 1.6567 last week and was last spotted trading near the 1.6300 support on Thursday.

The European Central Bank (ECB) announced recently that it was set to ‘tweak’ its major policy objectives, as it continues to battle the Coronavirus pandemic-induced economic fallout. For close to two decades, the ECB has sought to keep inflation just below 2% to tackle consumer price increases. However, given the recent sluggish price increases triggered by the economic crisis, a new inflation target could be implemented to prop-up the economy soon.

Speaking at a meeting with European lawmakers on Monday, ECB Chair Christine Lagarde warned that incoming data could portend further deflation (when inflation rates become negative), indicating that prices are falling rather than increasing.

Also, the EUR has come under further pressure following the second wave of the COVID-19 pandemic sweeping across Europe.

In other news, the Australian dollar (AUD) is not faring any better as it risks extending its decline from its yearly high against the US dollar set on September 1, ahead of the Reserve Bank of Australia’s (RBA) interest rate decision on the 6th of October. It seems that the central bank is considering cutting the Official Cash Rate (OCR) from 0.25% to 0.1% and probably introduce a government bond purchase program soon.

Regardless, the AUD appears to be performing strongly against the EUR and other G8 currencies on Thursday.

EUR/AUD – Hourly Chart

EUR/AUD Value Forecast — October 1

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6400, 1.6500, and 1.6567

Demand Levels: 1.6300, 1.6200, and 1.6100

The EUR/AUD continues on its retreat from the 1.6567 strong resistance and is now faced with the 1.6300 psychological level. Given the current momentum, we expect this pair to break below that support line in a bearish continuation towards the 1.6250-200 area.

However, in an unlikely event where it finds strong support at the 1.6300 level, the EUR/AUD could stage a recovery to the 50 SMA at 1.3410.

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EUR/AUD Price Analysis — September 24

EUR/AUD Price Analysis — September 24

The European stock markets fell sharply early on Thursday, as investors continue to scramble over fears that a second wave of the deadly Coronavirus in the coming winter in the northern hemisphere could derail an economic recovery.

France has joined other European countries in intensifying its restrictions on social gatherings on Wednesday, as infections and hospital admittances pick up. The U.K. and Belgium announced additional restrictions 48 hours earlier.

However, some good news came out of Europe on Thursday, as the sentiment surrounding the French manufacturing industry continued on a modest recovery through September. Traders will now be using the recently released German Ifo Business Climate index and the upcoming weekly US employment data to determine their next move in the market today.

Meanwhile, the AUD has been put under pressure on Thursday as the global risk sentiment—which it thrives off—continues to fade, diminishing the Aussie’s appeal as a higher-yielding asset.

This week’s comments from the Reserve Bank of Australia has also acted as a disservice for the Aussie, as investors modify their positions ahead of a possible rate cut in October.

EUR/AUD – 4-Hour Chart

EUR/AUD Value Forecast — September 24

EUR/AUD Major Bias: Bullish

Supply Levels: 1.6567, 1.6800, and 1.7000

Demand Levels: 1.6336, 1.6000, and 1.5960

The EUR/AUD has been accelerating upwards through the week to record fresh monthly highs around 1.6576 just a few hours ago. However, the upwards surge has been strongly resisted by the strong 1.6567 resistance in the meantime.

Buyers will have to increase their activities to break above this line in the near-term. Failure to do so could send the EUR/AUD on a slight correction to the 200 SMA (1.6336), where this pair could be met with strong dip-buying.

Meanwhile, a break above the 1.6567 resistance could send the pair to the 1.6800 level and, subsequently, the 1.7000 psychological line once again.

It’s worth mentioning, however, that the EUR/AUD has been trading within a wide range since early June between the 1.6567 resistance and the 1.6100 support.

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