Source: Forex Analysis
EUR/AUD has been quite bearish and volatile after rejecting off the 1.6350 area with a daily close recently. Despite upbeat economic reports from the eurozone, the EUR struggle indicates its waning strength over AUD that is expected to lead to further bearish pressure.
The stability risks emerging for the eurozone in the coming days has already affected EUR’s growth against AUD which may lead to further weakness. This week EUR found solid support from the recent economic reports which helped the currency to gain impulsive momentum over AUD recently. Today German Final CPI report was published unchanged as expected at 0.4% and Industrial Production was better than expected at 1.0%, increasing from the previous value of -0.7% which was expected to be at 0.4%.
On the other hand, Australia released positive economic reports this trading week which helped the currency to gain momentum. Despite downbeat data today, momentum sustained well enough. Today Australia’s Home Loans report was published with a decrease to -2.1% from the previous value of 0.0% which was expected to be at -0.9%. Additionally, RBA Financial Stability Review was a bit sluggish but helped the aussie to gain momentum against EUR.
Meanwhile, EUR’s struggle to gain momentum over AUD despite positive economic data published recently indicates severe weakness of EUR in comparison to AUD in the pair. As Australia comes up with better economic data in the coming days, further bearish pressure is expected in the future which might also result in strong counter-move as well.
Now let us look at the technical view. The price is currently quite impulsive with the bearish pressure while also residing at the edge of dynamic level of 20 EMA. The price has recently developed a Bearish Divergence in the process which indicates further bearish momentum in the pair. As the price remains below 1.6350 area with a daily close, it is expected to push lower towards the support area between 1.5900-1.6050 area in the coming days.
SUPPORT: 1.5900, 1.6050
The material has been provided by InstaForex Company – www.instaforex.com