The EUR/AUD can never be mixed up with any other chart. After a short highly volatile period, the rates returned to the flat trend in the range of 1.6096 - 1.6535 AUD. Over the summer, the Australian dollar felt very comfortable thanks to the active recovery of the Chinese economy after the first wave of coronavirus. Optimism on the market also motivated people to invest in commodity assets.
This month the situation has not changed for the Australian dollar. This currency is still receiving support by the improvement in the situation in China. Macroeconomic statistics meet or exceed the forecasts. In particular, this week, data on China's trade balance in August exceeded forecasts; earlier, investors were pleased with the response on manufacturing activity in China. As for Australia itself, the reports were mixed. In particular, the trade surplus, the lowest reading in 5 months, and the fall in export volume disappointed, but due to external factors, the AUD did not yield significantly to other currencies.
The euro is under pressure this week due to weak data on production in Germany, which grew by only 1.2%, although it was expected to grow by 4.7%. The focus of investors' attention is the ECB meeting, where investors would like to hear the latest economic forecasts. At the same time, a change in monetary policy is unlikely to come at this meeting.
We believe that the deals in favor of the AUD will be the most promising in the near future, given the continued optimistic mood on the market. Next week is expected to be more volatile for the EUR/AUD. Data on the industrial production output in China and the unemployment rate in Australia will be published. There will also be a lot of macroeconomic statistics from the eurozone. However, at the moment, taking into account the signals of technical analysis tools, we prefer the deals to SELL.
