Annual Forecast for EUR/AUD in 2024 & beyond: 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 2024.

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 2024 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 2024, 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 2024 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.

EUR/AUD Value Forecast — 2024

EUR/AUD 2024 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 2024 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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