Listen to the latest market mood for the EURAUD pair.

Europe has falling COVID-19 cases. Germany’s COVID-19 threshold remains below the key threshold of R 1.0. Furthermore, a huge spending PEPP programme of around €1.35 trillion alongside a proposed Recovery Fund to support the most struggling EU members like Italy should keep the EUR supported. Next week European Leaders will be meeting to authorise what could be a huge stimulus package. Although the package has been well signalled it is not fully priced in.

Australia, in contrast, has been forced back into lockdown measures as COVID-19 cases rise in Australia’s second most populous state of Victoria.

Therefore, expect EURAUD buyers from market with stops under 1.6000 and a target for buyers of 1.6950.

Day trade outlook – We expect this trade to play out over the next three weeks.

Trade Risks

  • If the European Recovery Fund is rejected by the frugal four this will weaken the EUR and invalidate this outlook.
  • Any fast fall in Australia COVID-19 cases would also invalidate this outlook.

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