If last Thursday trading was taking place below the 1.6300 level, today one euro is worth more than 1.6660 Australian dollars. The upward trend seen in recent days has been driven by a combination of factors, including:
- → Bullish factor for the euro: The European Central Bank (ECB) has revised its 2026 inflation forecast upwards (to 2.6%). The reason lies in the Middle East conflict and rising energy prices. This signals to the market that the ECB may not only refrain from cutting rates but could also begin discussing potential rate hikes this year.
- → Bearish factor for the Australian dollar: The Middle East conflict is placing significant pressure on China’s economy (which is already dealing with a property market crisis). A slowdown in trade with China is weakening the Australian currency. For more details, see the article: What Are Commodity Currencies?
However, the chart indicates that the bullish momentum is fading — this is reflected in a series of bearish divergences, with the RSI moving down from overbought territory.
Continuing the technical analysis of the EUR/AUD chart, it can be observed that price fluctuations have formed a long-term descending channel. In this context:
- → Bulls have shown initiative: after touching the lower boundary of the channel, they (as marked by arrows) gradually took control over intermediate channel levels.
- → The current situation can be interpreted as a period of short-term consolidation (with the formation of a narrowing triangle pattern). The triangle may have been broken this morning, but Australia’s inflation report came in line with expectations — and the market continues to consolidate.
If we assume that bulls manage to gather enough strength for another upward push, they may face a significant test in the form of a resistance zone:
- → the March high around the 1.6730 level;
- → the upper boundary of the descending channel.
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