Bearish
EUR/AUD tests 1.61 support amid Australia's inflation surge.
In the past 24 hours, EUR/AUD has declined, testing the 1.61 support level. This movement is driven by Australia's higher-than-expected inflation, which has intensified expectations of a rate hike by the Reserve Bank of Australia (RBA). The market is now pricing in a near-certain rate increase by November, bolstering the Australian dollar and exerting downward pressure on EUR/AUD.
Key points
- Australia's July inflation report revealed a 1.0% monthly increase, leading to a 3.5% annual rate, surpassing expectations and intensifying RBA rate hike bets.
- EUR/AUD broke below the 1.6260 support level, reaching its lowest point since early June, indicating sustained bearish momentum.
- The European Central Bank (ECB) is expected to maintain a hawkish stance, with markets fully pricing in a rate hike in September, potentially offsetting some of the Australian dollar's strength.
Sources
AI-generated from public news sources. Not financial advice.
