Before August, we saw an upward trend in favor of the Euro, but the upward momentum is hopelessly lost. Over the past 4 months there has been a gradual retreat from the maximum. Therefore, we can say for sure that this is not a price correction, but a downward trend that is just beginning its journey.
Job growth in Australia was reported this week, as was consumer sentiment as fears of rising rates subsided. Investors also appreciated the improvement in China's trade balance and better-than-expected industrial production growth, which contributed to the strengthening of the Australian dollar. Forecasts for 2024, relevant in December, are quite optimistic for the global economy, so investing in the Australian currency becomes more attractive.
As for the euro, good macroeconomic indicators are not yet enough to reevaluate this currency. The ECB meeting did not bring anything new: the rate was left unchanged despite a small margin compared to the higher rate in the United States.
Most technical analysis tools indicate the effectiveness of trades in favor of the Australian dollar in the short and long term, since the euro is an even weaker currency and does not have enough support factors. This coincides with our view of investing in AUD today, in anticipation of the continuation of the new downtrend.
