EURAUD Sitting on Major Demand: Base FormingEURAUD has been in a steady grind lower, and now it’s parked right on a higher-timeframe demand zone after a series of sharp impulsive drops and weak corrective bounces. This is the kind of location where reversals can start — but only if structure actually shifts. Right now, I see pressure slowing, reaction wicks, and small trendline breaks inside the zone, but not a confirmed trend reversal yet. For me, this is a reaction area first, trend change second — and confirmation matters.
Current Bias
Neutral with rebound potential
Broader structure is still bearish, but price is sitting at a well-defined support base. Bias is neutral here with scope for an upside corrective bounce — provided support holds and we get acceptance back above near resistance.
Key Fundamental Drivers
EUR side:
Eurozone inflation is cooling but not collapsing, keeping the ECB cautious rather than aggressively dovish.
ECB tone supports EUR on dips when data is not deteriorating sharply.
AUD side:
AUD is sensitive to global growth and China demand signals.
Recent activity and business indicators out of Australia have been mixed, not strongly AUD-bullish.
Relative rate expectations:
ECB and RBA policy paths are not dramatically diverging right now, which pushes this cross to be more growth and risk-flow driven.
Macro Context
Interest rate expectations:
ECB is in wait-and-assess mode on inflation. RBA is also cautious, with markets watching domestic inflation and labor closely. No extreme rate divergence — so macro data surprises matter more than policy levels.
Economic growth trends:
Eurozone growth is slow but stabilizing in pockets. Australia is highly exposed to Asia and China demand cycles. Any improvement in China data tends to favor AUD and weigh on EURAUD.
Commodity flows:
AUD is strongly tied to metals and bulk commodities. Stabilizing commodity prices tend to support AUD and cap EURAUD rallies.
Geopolitical themes:
Global trade and geopolitical tensions can hurt growth sentiment — that usually weighs more on AUD than EUR and can lift EURAUD during risk-off phases.
Primary Risk to the Trend
The main downside risk (for a bounce scenario) is a strong China or Australian data surprise that boosts AUD broadly and breaks this support zone cleanly.
The main upside risk (against the broader downtrend) is a run of weak Eurozone data that pushes ECB expectations more dovish.
Most Critical Upcoming News/Event
Australian employment and inflation data
China CPI / activity indicators
Eurozone CPI and ECB speakers
Broad global risk sentiment shifts
These are the releases most likely to break the current base.
Leader/Lagger Dynamics
EURAUD is a lagger cross.
It usually follows:
EURUSD for the EUR leg
AUDUSD and commodity sentiment for the AUD leg
It can influence:
GBPAUD and EURNZD after a move is underway.
AUDUSD and EURUSD typically move first — EURAUD adjusts after.
Key Levels
Support Levels:
1.6810–1.6760 demand zone (current base)
Break below opens continuation lower
Resistance Levels:
1.7060–1.7070 first resistance
1.7240 secondary resistance
1.7460 major resistance ceiling
Stop Loss (SL):
Below 1.6760 for bounce/reversal setups
Take Profit (TP):
TP1: 1.7060
TP2: 1.7240
TP3: 1.7460 if larger reversal develops
Summary: Bias and Watchpoints
EURAUD is sitting on a major support zone after a sustained down-move, so the immediate bias is neutral with rebound potential, even though the broader trend is still bearish. This is a location where corrective upside toward 1.7060 and possibly 1.7240 makes sense if the base holds. A clean break below the 1.6760 area invalidates the bounce idea and signals trend continuation lower. The key watchpoints are Australian and China data — if they come in strong, AUD likely leads and this floor gives way; if they disappoint, a relief rally in EURAUD becomes the higher-probability path.
Long
