EUR/AUD Leg Higher On Cards!

EUR/AUD Leg Higher On Cards!

EUR/AUD flirts with a strong resistance area after jumping above some near-term obstacles. The pair have shown reversal signals, but we still need confirmation before going long.

The price action indicated that the downside movement is over and that the pair may develop a new leg higher. The volatility is high in the short term, that’s why we have to be careful when deciding to go long.

EUR/AUD H4 Chart Analysis!

EUR/AUD escaped from a minor triangle and now is located above a downtrend line and right below 23.6% and under the median line (ML). Technically, the pair was somehow expected to increase after breaking above the major black downtrend line.

The breakout above the short-term downtrend line and through R1 (1.5551) was validated by a retest. Now, we need a valid breakout above the 1.5610, 23.6%, and above the median line (ML) to consider going long.

Conclusion! 

EUR/AUD is trading around a strong resistance area. So, we have to wait for the rate to take out the immediate resistance levels before taking action.

 

Note: Learn2Trade.com 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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Olimpiu Tuns graduated with a Master in Business Administration and is a seasoned Market Analyst / Trader / Trainer with 10 years of experience in the financial markets having expertise in Forex, Commodities, Index, Cryptocurrencies, and Stocks. He worked as a Market Analyst for three major brokerage companies, as a prop trader, and as a contributor/content creator for news portals and educational platforms.

EUR/AUD Price Analysis — February 11

EUR/AUD Price Analysis — February 11

The EUR/AUD pair traded with a slightly bearish tone in the early European session on Thursday, as investors take trading clues from the broader market risk mood.

Earlier today, the DAX futures contract in Germany traded up by +0.1%, CAC 40 futures in France was up by +0.1%, and the FTSE futures contracts in the UK climbed by 0.1%, as well.

Meanwhile, Credit Agricole (OTC: CRARY) reported a net income of €124 million in the fourth quarter, despite its recent goodwill charge at its Italian arm. Nonetheless, the Paris-based bank noted that the worst of the pandemic was now behind us.

However, German lender Commerzbank (DE: CBKG) announced a pessimistic forecast for the year, noting that its revenue will likely shrink “slightly” in 2021, as the bank reported a quarterly loss of €2.7 billion.

That said, the mixed sentiment in the European equity markets, coupled with the recent dovish speech by ECB Chair Christine Lagarde, put the Euro in a defensive position against other major currencies and could foment additional declines in the currency.

In other news, the cautious market mood undermined the risker Aussie and exerted some pressure on the currency.

However, the AUD found some support from the recent comments from Australian Treasury Secretary Steven Kennedy, where he asserted that the Australian economy was recovering faster than anticipated. Furthermore, the Australian Consumer Inflation Expectations for February climbed higher to 3.7% from 3.4%, providing an additional boost for the Aussie.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — February 11

EUR/AUD Major Bias: Bearish

Supply Levels: 1.5675, 1.5700, and 1.5750

Demand Levels: 1.5600, 1.5500, and 1.5400

The EUR/AUD continues on its range-bound momentum between 1.5700 and 1.5630, as the pair struggles with sustaining a break above the 1.5675 resistance. Given the current market conditions, the EUR/AUD will likely resume on a downwards journey along our descending channel to the 1.5300 support over the coming days and weeks.

That said, only a sustained break above the descending channel can flip the current bearish momentum currently in play with the pair.

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 — February 4

EUR/AUD Price Analysis — February 4

The EUR/AUD traded on a downbeat momentum in the early European session on Thursday, as the EUR comes under pressure from the ECB.

European Central Bank member Klaas Knot recently complained bitterly about the high valuation of the euro, noting that the institution had the tools to tackle this problem. Not so long later, reports showed that the ECB could cut its deposit rate—which currently sits at -0.50%—even further. This development is responsible for the depressed mood around the euro.

Meanwhile, some areas in Spain are already running out of vaccines, as the countries scurry to vaccinate their citizens. The vaccination fallout in Spain threatens to derail an economic recovery in the region, placing additional pressure on the EUR.

In other news, the Aussie is beginning to enjoy some demand, following the release of mixed Australian data over the week. The Q4 Consumer Price Index came in at 0.9% (YoY), beating economists’ 0.7% estimates, while the RBA Trimmed Mean CPI Q4 (YoY) came in at 1.2%. However, NAB’s Business Confidence contracted to 4 in December 2020, while Business Conditions climbed to 14 in the same period.

It’s also worth mentioning that risk catalysts like the growing US-China tensions, vaccine news, and US stimulus updates could determine the price action of the risk-based AUD in the coming hours and days.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — February 4

EUR/AUD Major Bias: Bearish

Supply Levels: 1.5800, 1.5900, and 1.5950

Demand Levels: 1.5675, 1.6000, and 1.5500

Despite a healthy bullish pickup last week, the EUR/AUD remained incapable of sustaining a break above our descending channel. The pair will now be on a journey to the base of the channel at 1.5400. However, completion of this cycle could take several days or even weeks.

That said, we expect a mild bullish correction to the 1.5800 resistance before we see a bearish continuation in the coming hours.

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EUR/AUD Price Analysis — January 28

EUR/AUD Price Analysis — January 28

The EUR/AUD traded on a very bullish momentum in the early European session on Thursday, as the prevailing market risk mood has sent the Aussie on a bearish spiral against other major currencies.

Germany reported yesterday that the country’s Business Confidence has dropped from 92.2 in December to 90.1 in January. This decline has placed some pressure on the euro over the past few hours.

Today, market participants will be looking at the Euro Area Consumer Confidence report for January. Speculators expect the Consumer Confidence report to drop from -13.9 in December to -15.5 in January because of the economic fallout from the second wave of the coronavirus in Europe.

The price dynamics of the euro is now at the mercy of the upcoming economic reports from the EU.

Meanwhile, ECB Governing Council Member, and Dutch Governor, Klass Knot has made some comments that suggest that the ECB is ready to implement further negative rates if needed.

In other news, Australia’s Import Price Index and Export Price Index for the fourth quarter should give Aussie traders some insight into what the currency could do in the near-term. It is worth mentioning that the price dynamics surrounding the AUD will be dictated by developments on the ongoing US-China tussle, coronavirus updates, and vaccine news.

EURAUD – 4-Hour Chart

EUR/AUD Value Forecast — January 28

EUR/AUD Major Bias: Bullish

Supply Levels: 1.6000, 1.6100, and 1.6200

Demand Levels: 1.5800, 1.5675, and 1.5600

The EUR/AUD has maintained a bullish streak since the emergence of the double-bottom pattern last week. Following a modest retrace from the 1.5800 resistance (now support) to the 1.5675 level, the currency pair initiated a strong rebound to the 1.5900 area where it currently lies.

However, the pair has now reached the top of our descending channel, suggesting that a significant decline could be just around the corner. That said, the EUR/AUD could negate this channel if this bullish momentum takes it back into the 1.6000 pivot zone.

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