AUD,NZD/EUR/USD/FXWW News/Technical Analysis

EUR/AUD macro view: Bullish weekly close

Since the EUR came into existence it traded pretty consistently against the AUD between 1.55 and 1.70, and then along came the GFC (see chart). EUR/AUD screamed higher above 2.00 when the big AUD carry trades were unwound in a hurry and then it collapsed back below 1.20 when the market thought the EUR was going out of existence. All seems pretty stupid now, but that’s what takes markets to extremes.

The break and close above weekly resistance at 1.4400 is a danger sign for the AUD as we could easily see this pair move higher towards longer-term median levels around 1.55. The bull trend seems to be in control and the main question is whether we go straight higher from here or whether we get more typical stop-climbing movements. I’m guessing that it will be more of the latter type as EUR/AUD is no longer in the severely oversold state that it was earlier this year.

  1. Hi Sean this looks worrying for aud bulls. After Friday’s night euraud bullish close and 1 pip tripping of 0.9000 for aud/usd, do you still think that aud can go back up to at least 0.965 levels from here? Or that has become elusive and we see lower levels from here. Thanks.

  2. My son is going to Europe next month and he was asking me when to buy euros and we were both pretty happy to catch the lowest rates in EUR/NZD around 1.62 before it went straight up along with EUR/AUD. You could be right and we could get back into a range again but with AUD/USD it also depends on USD strength, doesn’t it? I sold it on Friday evening when it looked like 90c is under serious threat but took the profits right on the figure.

    I am short USD/JPY – so I hope that AUD/USD will find a bottom at least for the immediate future. It might dip down under 90c again come Monday morning but hopefully a nice short covering rally will follow 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *