The AUD has a chance for strengthening amid the weakening EUR. The deals to SELL seem the most reasonable.
The uptrend continues. Recall that the Australian dollar, being a commodity currency, was under pressure due to the trade conflict between the US and China. At the same time, the Australian dollar has become a less attractive currency for investors because of the unconvincing economic indicators and soft monetary policy in the country. At the moment the euro costs 1.62 AUD, which is the highest value for the last 9 years. The euro cost more only earlier this month and in the period before December 2009. At the same time, it should be noted that the growth of the euro against the AUD continues, despite the weakening of the euro against other major currencies under the influence of the conflict between Italy and the EU. So, the rates recently have already tested the resistance line several times.
At the moment, we can see a certain consolidation in the range of 1.6 - 1.634 AUD. The Australian dollar managed to strengthen slightly due to the latest data about the Australian economy. In particular, it became known there was a reduction of unemployment to 5% in September, which is the lowest rate for the last 6.5 years. The RBA also cautiously hinted that in the future there might be an increase in interest rates.
The key day for the further development of the situation will be Thursday, when the ECB meeting will be held. Despite the statements of a number of officials about the necessity to raise the rate, investors do not expect a revision at the next meeting on Thursday. At the moment, most EU officials are likely to take a wait-and-see position until the conflict with Italy is resolved. In this situation, the most optimal would be the deals to SELL, given also that the consolidation of the rates can be considered as a sign of the flat trend formation. Market entry points can also be identified at the levels 1.6 and 1.634 AUD.
