Stagnation for EUR/AUD as 1.6590 level proves crucial

Justin Freeman

The single European currency has been suffering in its pair against the Australian dollar in recent months.

The pair has been stuck in its range between the 1.6590 point and the 1.6034 point from early summer onwards.

This was around the time that many riskier currencies began to bounce back following what was perceived as the beginning of the end of the first wave of the coronavirus pandemic.

The Aussie dollar has continued to benefit from a tentative move towards risk since then.

One suggestion on the table is that the pair could now begin to see a rise to the far end of its current bounded range.

This is located just above 1.6498 on the price chart and has been described as a resistance area.

From there, say strategists, it could go on to reach some of the high points it saw towards the end of May of this year.

In the opposite direction, analysts suggest, the pair could go down to some of its lows from last year – though that appears to be less likely at the moment given the weakness of the pair at present.

Moving away from price chart action, it is worth noting that there are several key events coming up for both of these currencies across the course of this week.

The economic calendar shows that Monday will be dominated by a speech from Christine Lagarde, the President of the European Central Bank.

This speech is due to be delivered at 12:45pm GMT and follows a recent meeting of the Europe-wide central bank.

More central banker speeches will be delivered on Tuesday, several of which have the capacity to move this pair.

Guy Debelle from the Reserve Bank of Australia is scheduled to speak at 12:30am GMT.

At 12pm GMT, there will be a speech from Fabio Panetta, who sits on the European Central Bank’s Executive Board.

However, it is important to stress that all of these events will be set against a context of a packed global economic calendar.

Tuesday will see speeches and testimonies from the likes of Jerome Powell at the US Federal Reserve – suggesting that events in Australia and Europe may be at risk of being knocked out of the headlines.

Preliminary Europe-wide consumer confidence figures for September will be out on Tuesday at 2pm.

These are expected to show no change from the last point at which they were recorded, which was -14.7.

In Australia, the Commonwealth Bank will reveal its preliminary purchasing managers’ index figures for September at 11pm GMT.

These will look at both manufacturing and services.

Both are likely to show a slight downward tick.

Early on Wednesday, meanwhile, preliminary retail sales figures for August will come out of Australia.

Month on month, this was last recorded at 3.2% – but there is as yet no economist prediction of where it will move to this time.

Justin Freeman

Latest news

China’s New Central Bank Digital Currency Dishes Out More Pain to The Dollar
The US dollar’s role as the world’s base currency is facing a new threat that could dramatically impact the broader financial markets. Read more
Russell 200 Index – US Jobs Report Could Signal a Good Week for Equity Markets
The positive US jobs report might have lit a fuse under equity markets, the Russell 2000 index in particular. Read more

Forex Fraud Certified Brokers

IQ Option Logo
XM Logo Logo
Oanda Small Logo
Plus500 Small Logo
LegacyFX Small Logo
City Index Logo
OctaFX Logo
IC Markets Logo
BlackBull Markets Small Logo
skilling logo
Exness Small Logo