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 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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