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 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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