Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
EUR/USD Eyes March-Low, EUR/AUD Retains Bullish Series Ahead of ECB

EUR/USD Eyes March-Low, EUR/AUD Retains Bullish Series Ahead of ECB

David Song, Strategist

EUR/USD struggles to hold its ground ahead of the European Central Bank (ECB) interest rate decision, with recent price action highlighting the risk for a further decline, while the rebound in EUR/AUD appears to be stalling ahead of the 2018-high (1.6192).

The President Mario Draghi and Co. may merely attempt to buy more time as ‘measures of underlying inflation remain subdued and have yet to show convincing signs of a sustained upward trend,’and more of the same from the Governing Council may do little to curb the recent decline in EUR/USD as the central bank continues to expand its balance sheet. As a result, the Euro may exhibit a more bearish behavior ahead of the second-half of the year as market participants push out bets for a rate-hike.

However, a material shift in the forward-guidance for monetary policy may heighten the appeal of the single-currency as the ECB pledges to conclude its quantitative easing (QE) program in September, and a more detailed exit strategy may trigger a bullish reaction in the single-currency as it boosts bets for higher borrowing-costs in the euro-area. Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

EUR/USD Daily Chart

EURUSD Daily Chart

EUR/USD appears to be on track to test the March-low (1.2155) as it extends the series of lower highs & lows from the previous week, while the Relative Strength Index (RSI) snaps the bullish formation carried over from late last year. A break/close below the 1.2130 (50% retracement) region raises the risk for a move back towards 1.1960 (38.2% retracement) to 1.1970 (23.% expansion), with the net downside region of interest coming in around 1.1810 (61.8% retracement).

EUR/AUD Daily Chart

EURAUD Daily Chart

EUR/AUD has staged a rebound following the string of failed attempts to close below the 1.5880 (78.6% expansion) region, and the pair appears to be making a run at the 2018-high (1.6192) as it extends the bullish sequence from earlier this week.

However, the broader outlook remains capped by the 1.6230 (100% expansion) region, which sits just below the 2016-high (1.6252), and the lack of momentum to clear the topside hurdles may spark a larger correction in EUR/AUD as the RSI appears to be flatten out ahead of overbought territory. Need a break/close below 1.5880 (78.6% expansion) to open up the downside targets, with the first area of interest coming in around 1.5720 (23.6% expansion) followed by the 1.5620 (61.8% expansion) region, which lines up with the March-low (1.5623).

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.