EUR/AUD has found bullish traction once again following hawkish ECB cut


  • EUR/AUD back in the hands of the bulls.
  • Bull targets comes at the 38.2% Fibo' of the recent range located in the 1.6240s.

EUR/AUD has found bullish traction once again and sits on the 1.61 handle following the European Central Bank event which let the doves down with a hawkish rate cut for the bare minimum.

The ECB cut the deposit rate 10bp to -50bp and reintroduced QE of EUR20bn. "That volume was towards the lower end of forecasts, but it is open-ended, so longer in duration than expected. The ECB is tiering the deposit rate, and some deposits at the central bank will be excluded from negative rates," analysts at ANZ Bank explained. 

Focus is back on the Fed

The focus now looks to the Federal Reserve next where a rate cut is priced in. "Markets are pricing 24bp of easing at the 19 September Fed meeting, and a terminal rate of 1.21% (Fed funds rate currently 2.13%)," analysts at Westpac explained. The euro can find traction should the Fed cut rates and do so dovishley, indicating further rate cuts if needed down the line. As for the Aussie, trade war tensions have eased up fuelling a bid on the commodity sector which the Aussie trades as a proxy. 

EUR/AUD levels

The cross burst below the critical support area made up of the 200-daily moving average, trendline support and a 50% mean reversion of the November July upside range, but was driven right back and to a higher close leaving a bullish pin bar on the daily charts. Bulls can target the 21 and 50-daily moving average that meets the 38.2% Fibo' of the aforementioned range located in the 1.6240s guarding a run to the May spike highs and the 23.6% Fibo located at 1.6450. 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

Gold prices collapse to $1,910 as huge profit-taking kicks-in

Positioning squeeze has taken place as the bulls feeling the heat bail out in droves, triggering stop losses to the bottom of the abyss. Real rates have been on the incline since last week's Nonfarm Payrolls report which beat expectations.

Gold News

AUD/USD starts Wednesday trading at fresh weekly lows

The AUD/USD pair is trading at fresh weekly lows in the 0.7130 price zone, as the dollar accelerated its advance ahead of Wall Street’s close. Australian Q2 wages’ growth coming up next.

AUD/USD News

EUR/USD turns negative at the end of the day

The EUR/USD pair trades near 1.1730 on renewed demand for the dollar. Optimism about US economic growth led the way, despite the coronavirus pandemic continues to limit economic activity.

EUR/USD News

Price Prediction Bitcoin, Ethereum, Ripple: Euphoria warns of danger

From the crypto ecosystem, the current moment invites us to look for opportunities to balance the portfolio towards Bitcoin, which after giving up market dominance against Ethereum, shows technical patterns that are favorable to a recovery in the short term.

Read more

WTI erases majority of daily gains

Crude oil prices started the week on a strong footing and the barrel of West Texas Intermediate (WTI) gained more than 1% on Monday. With the market sentiment remaining upbeat on Tuesday, the WTI extended its rally and touched a daily high of $42.91 but struggled to preserve its bullish momentum. 

Oil News

Forex MAJORS

Cryptocurrencies

Signatures