The EUR/AUD currency pair is a struggle of one weak currency against another, sometimes weaker one. However, we can see that the weak uptrend continues with no perspective for completion. The Australian dollar, which is heavily dependent on the economic situation in China, continues to be under pressure. Also, the Australian economy does not please investors, and the active easing of monetary policy which started this year is further worsening the position of the AUD.
This month the situation has not changed. Despite the pause in the trade conflict between China and the United States, the prospects remain uncertain and investment in commodity currencies is too risky. The key factor in reducing the AUD this month was the reduction of the RBA rate and their plans to continue with their dovishness in the near future while maintaining external risks. Therefore, investors began to closely monitor all the macroeconomic reports from Australia, trying to assess the probability of a further decrease. So far, macroeconomic reports only increase the likelihood of an active reduction in the rate. In particular, the consumer sentiment index published this week showed a 4.1% decrease in the index to 96.5 pips, which is the lowest level for the last two years. China's economy is also unlikely to support the AUD value.
The euro is also under pressure. The choice of Christine Lagarde as the next head of the ECB hints at a continuation of ahe current soft monetary policy. However, investors don't expect the ECB to decrease the rate but are waiting for an introduction of additional measures to stimulate the EU economy and the resumption of previously suspended programs. Another pressuring factor is the perspective of a trade conflict with the United States and the introduction of duties on European goods. However, in comparison with the AUD, the euro is more stable, despite the widespread economic downturn in the EU, including Germany.
In this situation, the deals to BUY will be the most optimal in the medium term, as evidenced by the majority of technical analysis tools, including the MACD and Stochastic oscillators.
