EUR/AUD has been quite impulsive with the recent bearish momentum which pushed the price below 1.5900 with a daily close. As EUR has been hurt by the economic reports, AUD found support from solid economic data in line with expectations. Thus, AUD is responsible for further bearish pressure in the pair.
Recently AUD has been propped up by the upbeat economic reports which came in line with expectations. Today AUD reports were quite mixed which will hardly make any strong impact on the overall AUD gains. Today AUD Retail Sales report was published with a decrease to 0.2% which was expected to be unchanged at 0.3% and PPI report showed a significant increase to 0.8% from the previous value of 0.3% which was expected to decrease to 0.2%.
On the EUR side, in the context of recent downbeat economic data and political turbulence, the eurozone's economy is currently under pressure which might continue to lose momentum in the short term. The weakness of the European currency is driven mostly by sluggish economic growth. Besides, investors are fretted about Italy's fiscal management issue in a stand-off with the European Commissions over its borrowings. Today Spanish Manufacturing PMI report is going to be published which is expected to decrease to 51.0 from the previous figure of 51.4, Italian Manufacturing PMI could have decreased to 49.7 from the previous figure of 50.0, French Final Manufacturing PMI is expected to remain unchanged at 51.2, German Final Manufacturing PMI is expected to be unchanged at 52.3 ,and the eurozone's Final Manufacturing PMI is also expected to be unchanged at 52.1.
Meanwhile, AUD has been quite optimistic in light of economic reports, in particular a significant increase in PPI which offsets a slight decrease in Retails Sales. On the other hand, EUR is quite indecisive and a bit dovish ahead of the upcoming economic reports. To sum up, EUR is expected to struggle further in the coming days to counter the AUD gains until Australia provides weak upcoming economic reports.
Now let us look at the technical view. The price set its bearish course in the pair when it broke below 1.6050 area with a daily close. After certain retest as the price cleared the Kumo Cloud support in an impulsive manner, the upcoming bearish pressure is quite imminent. As the price remains below 1.6050 area with a daily close, the odds are that the price will move much lower with a target towards 1.5600 support area in the future.
SUPPORT: 1.5500, 1.5600
RESISTANCE: 1.6050, 1.6350
BIAS: BEARISH
MOMENTUM: NON-VOLATILE
