Euro to Australian dollar rate hits 16-year rate peak: EUR/AUD remains under pressure

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Euro vs Australian Dollar drops 0.56%

Highlights

The Reserve Bank of Australia raised its policy rate to 4.85%, the highest since 2008.
Higher rates have increased demand for the Australian dollar, widening its appeal over the euro among yield-seeking investors.
EUR/AUD remains under selling pressure below key averages with a projected range of A$1.5935 to A$1.6107 and a 62% probability of further downside.

Australian dollar demand rises as rate hike draws yield seekers

The Reserve Bank of Australia raised its main interest rate to 4.85%, the highest level since 2008, according to Fxmag. This action makes the Australian dollar more appealing to yield-seeking investors by widening the rate differential with the euro. The rate increase has contributed to greater demand for the Australian dollar, in turn putting pressure on EUR/AUD as flows shift toward AUD-denominated assets.

Seller momentum persists as key resistance caps rebound risk

EUR/AUD is trading below the MA-20 and MA-50 on the hourly chart and beneath the MA-200 on the daily timeframe. The Ichimoku Kijun level at A$1.6085 acts as immediate resistance, with A$1.5935 as key downside support. Momentum indicators such as MACD and ADX both point to a persistent sell bias, while Bull/Bear Power and Awesome Oscillator readings support intraday seller dominance. Oscillators present a mixed picture: RSI is neutral, but Stoch RSI and CCI are in oversold zones, suggesting selling exhaustion and highlighting the risk of a short-term rebound even as broader signals stay bearish.

Range-bound outlook as downside risk outweighs near-term gains

Over the next one to two days, EUR/AUD is expected to trade between A$1.5935 and A$1.6107. The probability of an upward move stands at 38%, while the downside scenario is more likely at 62%. The baseline expectation is for the pair to remain sideways within this volatility band; a bullish scenario would require a decisive break above A$1.6085 resistance, while a bearish extension could unfold if support at A$1.5935 fails.

Viktoras Karapetjanc, expert at Traders Union, sees that fundamental and macro drivers continue to favor the Australian dollar over the euro in the near term. He believes the RBA’s assertive rate hike has reinforced investor demand for AUD, while technical signals confirm a sustained downward bias for EUR/AUD. However, he also recognizes short-term exhaustion risks if support at A$1.5935 holds. "The path of least resistance remains down for EUR/AUD, but I would look for signs of stabilization near A$1.5935 before anticipating any significant rebound," says Karapetjanc.

Previously it was reported that EUR/AUD was exhibiting a bearish technical structure with mixed signals from momentum indicators. This view is reinforced by the latest data, as continued downside pressure and an elevated likelihood of further declines make A$1.5935 a critical support level to monitor in the near term.

Source of Data: EUR Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.