EURAUD is up 0.16% on the day after the latest minutes from the Reserve Bank of Australia (RBA) hinted that more stimulus is possible. The minutes follow the recent decision to slash rates and embark on bond buying.
The RBA minutes from the November 3rd policy meeting showed the bank’s reluctance to move to negative interest rates, which the board said was not “sensible”. The bank cut rates from 0.25% to a record low of 0.1%, which is more in line with European rates, but the Aussie currency has still advanced against the Euro since the meeting.
The RBA launched a new bond buying program which will see purchases of A$100 billion debt over the next six months. The minutes said that the bond program will be the focus in the months ahead, but the board underlined that they were, “…prepared to do more if necessary”.
Tomorrow will see the release of the latest Eurozone inflation figures and this could be a driver for the EURAUD pair. The data is expected to show a 0.2% growth in prices, which would match last month’s number. The ECB had previously been critical of the euro’s strength and its deflationary impacts but this is more relevant to its larger trading partners, where the U.S. and China dominate. Australia also doesn’t feature in foreign direct investment into the eurozone above 1%.
EURAUD Technical Outlook
EURAUD is trading in a range between 1.6150 and 1.6350. The pair will need a breakout either way to see a new trend develop. The upside and downside targets are both 200 pips away at 1.6000 and 1.6200. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
EURAUD Daily Chart