The downtrend continues within the uptrend. The rates are confidently approaching the level of last year, before the beginning of the coronavirus pandemic. This month, the euro was under pressure due to the rapid spread of the coronavirus in the EU, as well as the record fall in business activity and other negative effects of the quarantine on the EU economy. Forecasts are also negative. In particular, according to the ECB head, Christine Lagarde, the economy in the EU will shrink by 15%.
The Australian dollar feels confident against this background. As an indicator of the economic situation in China, the AUD is strengthening, taking into account the recovery of economic activity in China and the end of the quarantine. Australia is also gradually coming out of quarantine, and recently published reports on inflation were encouraging and supported the value of the AUD.
This week will be key for the EUR/AUD, as central banks will hold meetings in key countries. Of course, the results of the Fed meeting are of great importance to investors, and this may also indirectly affect the value of the Australian dollar, given the willingness of investors to buy commodity assets.
However, the key day will be tomorrow, when data on business activity in China, unemployment reports in Germany, and the consumer price index in the EU will be published, and an ECB meeting will also take place. So today is a great time to open new deals. We believe that the deals on the trend will be most effective in the near future. Most technical analysis tools also lean towards the deals to sell.
