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.

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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