EUR/AUD Price Analysis — January 21

EUR/AUD Price Analysis — January 21

The EUR/AUD is starting to gain some bullish momentum, following a retest and rejection from the 1.5600 support level and a bullish Euro.

The European Union (EU) reported yesterday that the Euro Area Inflation Rate dropped by 0.3% YoY in December, while the Core Inflation Rate rose by 0.2%—fulfilling analysts’ forecasts.

Meanwhile, prices remained weakened in the Euro Area because of the damaging impact of the second wave of coronavirus in the region. This factor is responsible for the weakness seen in the Euro for weeks now.

Moving on, the FX market will be watching the ECB closely today, as it is scheduled to release its Interest Rate Decision and other commentaries. Speculators are sure that the rates will remain unchanged, while traders will focus on the ECB’s evaluation of the prevailing economic situation.

In other news, Australia recently reported a positive Unemployment Rate figure, recording a decline from 6.8% in November to 6.6% in December, surpassing speculators’ forecasts. Meanwhile, the Employment Change data showed that employment in the country jumped by 50k in December, also in line with forecasts.

However, a slowdown in full-time employment kept Aussie bulls from placing aggressive bets, which has diminished the prospects for significant gains for the currency against the EUR.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — January 21

EUR/AUD Major Bias: Bullish

Supply Levels: 1.5675, 1.5800, and 1.5900

Demand Levels: 1.5600, 1.5500, and 1.5400

The EUR/AUD appears to be gearing up for a bullish rally in the coming hours and days. The pair have recorded a double-bottom pattern on our 4-hour chart, indicating that a bullish retracement might be around the corner. The 1.5600 psychological line—which hasn’t been broken since December 2018—will likely serve as a repellent against AUD bulls in the meantime.

Apart from that, the decline to the 1.5600 support also coincides with the position of our descending channel, further bolstering the prospect of a bullish retracement soon.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results. 

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EUR/AUD Price Analysis — January 14

EUR/AUD Price Analysis — January 14

The EUR/AUD continued on a sharp descent towards the 1.5600 in the mid-European session on Thursday, amid a weakening Euro.

The political uncertainty in Italy has caused investors to become reserved towards the EUR. Three ministers from the ruling coalition resigned yesterday, putting the future Prime Minister, Giuseppe Conte, in a precarious position.

If Conte is unable to assemble a new majority soon, it is likely he will be dropped from the new government. However, early elections are not likely to be organized because of the pandemic, not at least every other option has been exhausted by the parliament.

Meanwhile, the ECB’s PEPP has been very instrumental for the Italian debt market and will likely keep negative effects from the political fallout at bay, especially considering that the ECB has just expanded its planned purchases to EUR1.85 trillion. Italy is also scheduled to receive EUR208 billion of EU Recovery Funds. That said, these factors should prevent unrestrained declines for the EUR in the near-term,

In other news, a near-total wipeout of COVID-19, an upbeat global market risk mood, and pro-cyclical exposure to Asian demand have been very helpful in driving the price of Aussie higher. That said, speculators are starting to suggest that the RBA might push against a strong AUD through further dovish monetary policies.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — January 14

EUR/AUD Major Bias: Bearish

Supply Levels: 1.5675, 1.5800, and 1.5900

Demand Levels: 1.5600, 1.5500, and 1.5400

The EUR/AUD is barreling down our descending channel as the 1.5600 psychological support comes into view for the first time in more than two years. Bulls could take advantage of the fact that the pair has gotten to the base of our channel as an opportunity to take the price higher.

That said, failure of the EUR/AUD to facilitate a bounce above the 1.5675 resistance in the coming hours and days could confirm a descent to the 1.5600 and lower.

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EUR/AUD Price Analysis — January 7

EUR/AUD Price Analysis — January 7

The EUR/AUD traded on a sideways momentum around 1.5835 on Thursday, amid chaos in US Capitol.

The Euro has been largely influenced by movement in rival currencies. However, the Eurozone’s upbeat economic recovery outlook continues to steady the currency against drastic fluctuations in rival currencies.

Meanwhile, this week’s EUR/AUD price movement has been directed by the Aussie, as today’s better-than-expected Eurozone data failed to make any dent to the price dynamics of the EUR. German factory orders from November performed better than forecasts, as it beat an expected contraction and came in at 2.3%. However, the Eurozone Construction PMI was worse than expected at 45.5.

The optimism that the Coronavirus vaccines will bolster the recovery of the Eurozone economy continues to provide support for the EUR.

In other news, the Aussie—which is highly correlated to market risk sentiment—has been on a roll this week following recent developments in global politics and the COVID-19 pandemic.

Chaos erupted in DC, USA yesterday, as dissatisfied Trump supporters broke into the Congress building to protest the recent US election results. The mob was incited by US President Donald Trump, who continues to wrongfully claim—according to official sources—that the election was ‘stolen’ from him.

Investors with more risk tolerance are expected to continue buying the AUD, once the political unrest in the US quells.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — January 7

EUR/AUD Major Bias: Sideways

Supply Levels: 1.5900, 1.6000, and 1.6100

Demand Levels: 1.5800, 1.5675, and 1.5600

The EUR/AUD continues to stall around the 1.5800 crucial support, indicating that bears are losing power. Not surprisingly, this consolidation is happening near the base of our descending channel, and we expect a correction to the upside (1.6100) in the coming days and weeks.

Meanwhile, the MACD indicator shows that the pair is currently in oversold conditions, and a correction to more neutral conditions might be underway.

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EUR/AUD Price Analysis — December 31

EUR/AUD Price Analysis — December 31

The EUR/AUD continued on a bearish decline in the early European session on Thursday, as the risk-backed Aussie soars amid efforts by the ECB to weaken the Euro.

ECB Governing Council Member Oli Rehn reiterated comments made by other ECB members—like President Christine Lagarde, Francois Villeroy de Galhau, and Philip Lane—that ‘jawboned’ the EUR. Comments like that are structured to disrupt the growth rate of the EUR, especially against the US dollar (DXY). In this case, the GCM hinted that if the Euro continues to appreciate the ECB will “do something about it.”

However, except the bank is ready to ease monetary conditions further by cutting interest rates and increasing asset purchase pace, analysts believe that the ECB is just bluffing. Already, the bank had announced earlier in December that its goal at the moment was to maintain its already-eased monetary policy, probably for an extended period. This detail makes analysts even more convinced that the ECB was bluffing when it noted that it could ease monetary conditions further.

Meanwhile, the Aussie got an additional price boost from an upbeat data release from China’s official Purchasing Managers Index (PMI) for December. The National Bureau of Statistics (NBS) of China reported that December’s Manufacturing PMI dropped from 52.4 to 51.9, while the Non-Manufacturing PMI rose past the 56.4 previous readouts to 55.7.

That said, the AUD is expected to keep gaining against the EUR in the coming days.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — December 31

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6008, 1.6100, and 1.6200

Demand Levels: 1.5900, 1.5800, and 1.5675

The EUR/AUD currently barrelling towards the 1.5900 level, and we could see lower in the coming days. Bears got a confirmation yesterday following the break below the crucial 1.6008 pivot point.

Meanwhile, the pair is still some distance away from oversold conditions, meaning more declines are likely in the coming days. However, it’s worth mentioning that the current bearish momentum could be negated if the EUR/AUD finds healthy demand around the 1.5900 area.

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Annual Forecast for EUR/AUD (2021): Prolonged Consolidation Lies Ahead

Annual Forecast for EUR/AUD (2021): Prolonged Consolidation Lies Ahead

The EUR/AUD has had a rather tumultuous year but has managed to end almost exactly where it began, 1.6100. Before we go into the technicals, let us look at some of the fundamental factors that could affect this pair in 2021.

The European Central Bank plans to weaken the Euro to prop up the Eurozone’s inflation rate, considering that direct intervention in the foreign exchanges seems unlikely at this point.

The ECB will likely ease its monetary policy in the first quarter of 2021 to bolster the economy amid the pandemic-induced financial crisis, and in normal times that might have weakened the Euro. However, the correlation between monetary policy and the and the EUR seems to have been altered of late following the Coronavirus outbreak. That said, further easing by the ECB in 2021 will not affect the Euro.

Meanwhile, the Aussie also remains upbeat as the Reserve Bank of Australia continues to hold off a negative interest rate policy (NIRP). The RBA will likely keep its official cash rate (OCR) at the record low of 0.10% well into its next meeting in the first quarter of 2021, as Governor Philip Lowe and other RBA policymakers remain steadfast in their resolve to keep the interest rate above negative levels.

That said, the RBA could keep on using its balance sheet to prop up the Australian economy after announcing plans to buy “$100 billion of government bonds with maturities of around 5 to 10 years over the next six months” back in November.

However, the ASX 30 Day Interbank Cash Rate Futures February 2021 contracts show that another rate cut is just around the corner, with expectations of a 65% interest rate decrease to 0.00% at the RBA’s next Board meeting.

That said, the EUR/AUD could continue to sway well into February 2—the next RBA meeting—as central banks continue to double down on their efforts to boost the global economy.

EURAUD – Weekly Chart

EUR/AUD Value Forecast — 2021

EUR/AUD 2021 Bias: Sideways

Supply Levels: 1.6800, 1.7300, and 1.8000

Demand Levels: 1.6000, 1.5675, and 1.5120

2020 saw the EUR/AUD trade steadily up the channel, before the Black Thursday event in March, which caused the pair to spike close to the 2.0000 round figure. The pair practically spent the remainder of the year recovering from that spike to its original trend.

As mentioned earlier, the EUR/AUD will likely remain range-bound at the beginning of 2021 between 1.6600 and 1.6000.

Following this period, the pair could, once again, find its way back into the ascending channel. That said, the lowest expectation for the EUR/AUD is 1.5800, while the highest expectation for us is the 1.7600 round figure.

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EUR/AUD Price Analysis — December 17

EUR/AUD Price Analysis — December 17

The EUR/AUD traded on a bearish momentum in the European session on Thursday, as volatility across markets picks up.

Negotiations between the European Union and the UK over a Brexit trade deal appears to be making good progress. However, both sides remain adamant over the fishery sector, a sensitive issue for both parties. Nonetheless, the recent rally in the Pound is dragging the Euro along.

Meanwhile, COVID-19 cases across the continent continue to spread despite renewed lockdown measures and have infected French President Emmanuel Macron.

Yesterday, the EU reported better-than-expected Manufacturing PMI and Services PMI numbers, indicating decent economic recovery despite the effect the Coronavirus pandemic has had on the eurozone.

Later today, the EU will be publishing its inflation data for November. Analysts expect an upbeat report on the Inflation Rate (YoY) and the Core Inflation Rate.

In other news, strong commodity performance will continue to be a source of strength for the Aussie. Iron ore exports broke a new record high of A$11 billion in October and represented 36% of Australia’s total exports. The mining sector was partly responsible for the improved budget reported by the Australian federal government this week.

However, further easing measures and dovish monetary policy by the Reserve Bank of Australia in 2021 could place a lid on any significant rally in the Aussie.

EURAUD – Hourly Chart

EUR/AUD Value Forecast — December 17

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6100, 1.6150, and 1.6200

Demand Levels: 1.6000, 1.5950, and 1.5900

The EUR/AUD suffered a sharp dip earlier today, after a seven-day consolidation period between 1.6140 – 1.6050. This pair has failed to reclaim the crucial 1.6100 level, making further declines likely in the meantime.

However, the EUR/AUD saw a goodish bounce off the 1.6000 psychological level a few hours ago. Failure to regain a footing above the 1.6100 price point in the coming hours could force this pair below 1.6000.

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EUR/AUD Price Analysis — December 10

EUR/AUD Price Analysis — December 10

The EUR/AUD traded on a bearish momentum on Thursday as bears gain the upper hand. The European Central Bank (ECB) has alluded through posturing that it is set to “recalibrate its instruments” in today’s meeting. That said, we are likely to see a EUR500 billion increase in PEPP, which will be used to bolster monetary stimulus across the eurozone at least through to the end of 2021.

Meanwhile, the ECB does the unexpected and cut its discount rate even further into negative territory. While using negative interest rates for extended periods could have its benefits, there’s also the possibility that it could have adverse effects on the EUR. Furthermore, a deteriorating political cohesion in the eurozone or the EU, which seems increasingly likely by the day, could undermine demand for the euro even further.

In other news, commodity performance of late remains very supportive for the Aussie, with the iron ore index at a seven and a half year high of $150. This report builds a strong case for the near-term prospects of the AUD.

Meanwhile, the Australia-China trade relations continue to falter. Following China’s MOFCOM decision to increase the tariff on Australian wine from 107.1% to 212.1%, countervailing deposits were increased by 6.3% to 6.4% some hours ago.

With the prospects for further counter-sanctions and tariff hikes still in the mix, the Aussie could see a slowdown in its bullish momentum.

EURAUD – Hourly Chart

EUR/AUD Value Forecast — December 10

EUR/AUD Major Bias: Bearish

Supply Levels: 1.6200, 1.6330, and 1.6400

Demand Levels: 1.6100, 1.6000, and 1.5900

The EUR/AUD has broken out of its sideways momentum and is now barrelling towards lower support levels. After failing on three occasions to break above the 1.6400 resistance, the EUR/AUD has now been strengthened to take the price lower.

At press time, the pair is set to take on the crucial 1.6100 support line. It is worth mentioning that this line has been unbroken despite several attempts for the past six months.

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EUR/AUD Price Analysis — December 3

EUR/AUD Price Analysis — December 3

The EUR/AUD traded through the early European session on Thursday in a sideways manner, as the pair reels from its recent bull run.

The European Union reported yesterday that the Euro Area Unemployment Rate dropped from 8.5% in September to 8.4% in October, just as analysts predicted. According to a BK Asset Management official, Kathy Lien, strong economic data and a slowdown in the number of COVID-19 cases across the Eurozone is responsible for the current bullish strength seen in the euro.

Meanwhile, the European Central Bank (ECB) is expected to announce additional stimulus measures in its meeting on the 10th of December. This plan was telegraphed by the ECB, allowing traders to price-in the effect of the news beforehand. That said, the lack of surprise from the impending news could bolster the euro.

In other news, the Aussie was supported by the recent upbeat domestic trade balance, which recorded a surplus in the economy. However, a cautious mood around the equity markets failed to provide any demand for the riskier Australian dollar. This could thwart any significant price action in the AUD, causing traders to seek other flourishing currency counterparts like the EUR.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — December 3

EUR/AUD Major Bias: Sideways

Supply Levels: 1.6400, 1.6512, and 1.6567

Demand Levels: 1.6200, 1.6100, and 1.6000

The EUR/AUD broke above the long-prevailing descending channel, thereby negating its previous bearish tone. The pair likely found some support near the 1.6100 line, which has prevented a sustained decline towards the 1.6000 all through the year.

Currently, the pair is trading within a consolidation range between 1.6400 and 1.6330. A break above the 1.6400 could facilitate further climbs to the 1.6567 crucial resistance.

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EUR/AUD Price Analysis — November 26

EUR/AUD Price Analysis — November 26

The EUR/AUD traded on a sideways bias into the early European session Thursday, as volatility across markets spike.

All eyes are now on the European Central Bank’s meeting minutes release. Speculators expect an expansion in Quantitative easing, but the extent of the easing is unknown. Also, there are suspicions that the apex bank could opt for further rate cuts considering that the option has never been denied by the bank. While printing new euros has supported the currency during the COVID-19 pandemic, a rate cut in borrowing cost could be bad for the euro.

Meanwhile, Germany is preparing to impose renewed lockdown restrictions, unlike the trend in France and Spain, where case curves have gotten bent. German Chancellor Angela Merkel explained that Coronavirus infections in the country are still too high and that additional measures needed to be adopted to curb the spread. However, a slowdown in Germany’s economy would have severe negative impacts on the euro’s gains.

In other news, commodities continue to bolster the Aussie, as recent data measuring Australia’s commodity export show that export prices are nearing a seven-year high, with iron ore above $125 per tonne.

Also, November was a decent month for retail sales and jobs records in the country, while state border reopenings gave investors confidence that the RBA’s easing measures would yield the positive outcome it was intended to.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — November 26

EUR/AUD Major Bias: Sideways

Supply Levels: 1.6200, 1.6330, and 1.6400

Demand Levels: 1.6150, 1.6100, and 1.6000

The EUR/AUD has been trading within a tight range between 1.6230 and 1.6150 for the past few days, with the 1.6200 price point being the crucial pivot level. The tone surrounding the upcoming ECB meeting minutes release should direct the next sharp move in the coming hours.

Nonetheless, the overall bias on this pair remains tilted to the downside.

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EUR/AUD Price Analysis — November 19

EUR/AUD Price Analysis — November 19

The EUR/AUD traded on a bullish tone above the 1.6250, as the focus moved to the European Union (EU) summit set to hold later today, where leaders will likely push for a coronavirus recovery fund.

The Eurozone is on the brink of a renewed economic contraction with the second wave of the Coronavirus sweeping across the currency bloc. That said, a decisive fiscal response is needed to bolster the EUR in the near-term.

According to a recent interview by Reuters, an unnamed French official said that European leaders could forge ahead with the post-COVID-19 recovery fund and EU budget without Hungary and Poland if the two countries continue to delay adopting the proposed long-term budget.

A budget deal will immediately ease the pressure on the European Central Bank to implement additional easing measures and boost inflation expectations, which will improve the demand for Euro.

Meanwhile, Australia’s handling of the Coronavirus outbreak remains very effective and successful. Also, Victoria is opening up and has boosted new jobs recorded in October, as the country announced a whopping +179K jobs as opposed to the expected -30K.

However, the tensions between China and Australia continue to escalate even though both nations recently signed the RCEP ‘free trade agreement.’ This rift has caused the Aussie to suffer some weakness in the meantime.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — November 19

EUR/AUD Major Bias: Bullish

Supply Levels: 1.6330, 1.6400, and 1.6512

Demand Levels: 1.6200, 1.6100, and 1.6000

The EUR/AUD has picked some bullish steam, following its recent rejection from the 1.6200 psychological support. We expect to see a healthy stride towards the top end of our descending channel around 1.6400 as the EUR to find some support from the EU meeting later today.

However, it is worth mentioning that the pair has been in a consolidation range between 1.6200 and 1.6330 for the past few days. That said, a decisive break above the 1.6330 resistance should confirm our upward bias.

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.