Short- and Medium-Term Outlook for the Euro/Australian Dollar Pair 

The Euro/Australian Dollar Pair from an Economic Perspective

The euro/Australian dollar pair rose on Wednesday amid a lack of economic data from Australia, Meanwhile, interest rates are expected to rise by 25 basis points at the European Central Bank’s meeting tomorrow, Thursday, and the market has already priced in another hike of the same magnitude for December.

We expect tomorrow’s rate hike decision to take a hawkish tone (suggesting a tightening of monetary policy), as President Lagarde will unveil the latest forecasts and highlight ongoing concerns about the risks of rising inflation.

EUR/AUD from a Technical Perspective

The EUR/AUD pair is trading near the lower boundary of the descending price channel on the daily chart, driven by a positive MACD divergence.

We expect the pair to rise, targeting 1.6165 as an initial target, then 1.6250 as a secondary target, and finally the upper boundary of the channel near 1.6350 and around that level.

This scenario would fail if the pair breaks below 1.6170 and closes below that level on at least one 4-hour candle.