EUR/AUD sideways in Asia as Aussie considers its options

  • Euro softening against the AUD as EU data begins to stutter.
  • ECB dropping bearish rhetoric failed to jumpstart the EUR.

The EUR/AUD is having trouble making up its mind heading during the early Asia session, trading near 1.5670.

The Euro is beginning to suffer a lack of confidence as economic projections and inflation expectations for the European Union (EU) are beginning to cool, and despite the European Central Bank’s (ECB) dropping of key bearish statements in their latest showing, bears are starting to come out of the woodwork to drag the EUR down. 

The Reserve Bank of Australia’s (RBA) assistant governor, Michele Bullock, spoke at the Seamless Australia Payments Conference, but any reaction will be limited as Bullock will not be addressing monetary policy directly. The AUD is continuing to flop around in markets, being led around the circle by risk sentiment in Asia markets stemming from scandal in the Japanese parliament following revelations that Prime Minister Shinzo Abe and Finance Minister Aso forged documents to hide Abe’s wife’s name from paperwork linking the PM’s wife to a government land sale to a school developer at a steep discount. The scandal effect can be expected to fade quickly, but the impact is poorly-timed, with little impactful data slated for this week to drive markets.

EUR/AUD Technicals

The pair is steeply off March’s high of 1.5978 following several days of declines and is back into the consolidation zone that plagued the EUR/AUD through most of February. H4 candles have the pair looking for a foothold after putting the brakes on last week’s slide, and a retracement from this level will see resistance at the 38.2 and 50.0 Fibo levels at 1.5758 and 1.5800 respectively, while the bottom at 1.5625 continues to provide support alongside the 34-day EMA, currently nearby at 1.5664.

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