EUR/AUD drops to 17-month low post Australia CPI release

Omkar Godbole FXStreet Contributor

Better-than-expected Australia CPI release and the resulting drop in RBA November rate cut bets is pushing Aussie higher across the board. EUR/AUD fell to 1.4127 (lowest since May 2015) and was last seen trading around 1.4147 levels.

Eyes 50% Fibo support

The cross appears on track to test support at 1.4095, which is 50% Fibonacci retracement of the rally from August 2012 low to August 2015 high. Demand for Aussie spiked after Australia Q3 inflation data bettered estimates. This pushed RBA Nov rate cut bets down to 6% from 15%.

A moderate drop in EUR/USD in Asia is also adding to the bearish pressure around EUR/AUD cross.

EUR/AUD Technical Levels

Breach of support at 1.4095 (50% of Aug 2012 low-Aug 2015 high) would open doors for doors for a deeper sell-off to 1.40 – 1.3929 (May 2011 high). On the other hand, a breach of resistance at 1.42 (zero figure) would expose 1.4348 (Dec 2015 low) and 1.4467 (Mar 2016 low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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