EUR/AUD has been impulsive with the bearish gains since it bounced off the 1.6350 area with a daily close being in a strong bullish trend earlier. AUD is currently the stronger currency in the pair which might lead to further bearish pressure despite the recent bullish bounce off the 1.6050 area.
Though EURO has been the dominant currency in the pair but recently, due to certain economic issues EURO, is struggling to gain momentum over AUD with better sustainability. The Budget Deficit of Italy has affected the gains of EURO in certain extent and was recently rejected by Europe Union as they claimed that it broke EU rules on Public Spending and asked Rome to submit another one by three weeks or face disciplinary actions. Today the EURO French Flash Manufacturing PMI report is going to be published which is expected to slightly decrease to 52.4 from the previous figure of 52.5, French Flash Services PMI is expected to slightly decrease to 54.7 from the previous figure of 54.8, German Flash Manufacturing PMI is expected to decrease to 53.4 from the previous figure of 53.7 and German Flash Services PMI is also expected to decrease to 55.5 from the previous figure of 55.9. Additionally, EURO Flash Manufacturing PMI is expected to decrease to 53.0 from the previous figure of 53.2 and EURO Flash Services PMI is expected to decrease to 54.5 from the previous figure of 54.7.
On the AUD side, recently RBA Assistant Governor Debelle and Bullock spoke about the recent challenges in the economy which are portrayed much worse than the actual situation. Though the Employment Change report which was published last week had a mixed overview the decrease in Unemployment from 5.3% to 5.0% is also a remarkable factor to be considered. Though this week there is no impactful economic reports to be published on the AUD side having a strong hawkish perspective for the economy from the Assistant Governor did make the market bias follow the currency towards its gains.
As of the current scenario, EURO economic reports yet to be published are expected to be quite dovish whereas AUD has been quite positive with the recent speeches from the RBA officials. Though EURO has certain chances to push back up but as the market sentiment is favoring AUD for the hawkish statement from the officials, EURO needs to provide better outcomes of the upcoming economic reports and events for a strong growth in the future.
Now let us look at the technical view. The price recently bounced off the 1.6050 area with a daily close after an impulsive bearish pressure from the 1.6350 area. Currently the price is residing below the dynamic level of 20 EMA after an impulsive bearish pressure leading to a strong bullish rejection yesterday with a daily close which does indicate further bearish momentum in the coming. As the price remains below 1.6350 with a daily close, there are possibilities of price to move lower towards 1.6050 and later towards 1.5900 area in the future.
SUPPORT: 1.5900, 1.6050
RESISTANCE: 1.6350, 1.6500
BIAS: BEARISH
MOMENTUM: VOLATILE
