Testing times for EUR/AUD as trendline comes under threat

The euro fell against the Australian dollar today, continuing its current losing streak and putting the upward trend under pressure for the first time since November last year.

France’s economy may be expanding ahead of forecasts but it looks like Germany is slipping back slightly, suggesting GDP growth will be closer to 2% rather than 3%.

France’s manufacturing purchasing managers index hit a 33-month high in March, at 51.9, but any positive feeling was dispelled by the German number, which edged back slightly despite remaining in expansion territory. We know that the European Central Bank is still unlikely to make any changes in policy that may help stimulate the eurozone, so the focus in the currency pair shifts to the Aussie. Now that the New Zealand central bank has increased its rates, there is a view that the Reserve Bank of Australia will, at least, issue a more hawkish statement.

EUR/AUD now sits plum on the uptrend that began almost exactly a year ago. There has only been one real test of this move higher, during November, and then we saw a convincing bounce that carried the currency cross to its highest level since 2010.

If we can hold above the uptrend around AUD$1.5080, then the March highs in the region of $1.5400/$1.5455 become the target. Even if the uptrend is broken, the $1.5000 level should provide notable support. Tomorrow’s German IFO index could help lift euro sentiment, but we do appear to be at a crucial point in the current uptrend for EUR/AUD.

Spot FX EUR/AUD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.