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2 Apr 2014
EUR/AUD protected by 1.4914 daily low
FXStreet (Guatemala) - EUR/AUD is trading at 1.4917, up 0.02% on the day, having posted a daily high at 1.4937 and low at 1.4914.
Yesterday, markets took note of the statement from the RBA continued to indicate a period of stable rates.
EUR/AUD now awaiting ECB
Strategists at Bank of America Merrill Lynch explained that although March euro area inflation was on the low side of economic forecasts (at 0.5% yoy versus market expectations of 0.6%), they do not believe this will be enough to trigger ECB action yet as (1) most of the drag is coming from energy and (2) the ECB, like us, expects a rebound in April inflation on the back of disappearing energy drag and a boost from the Easter timing (late April this year, in contrast to March last year, affecting the services component).
However, we see two implications from the low March figure: (1) the ECB may try talking the euro down, highlighting the possibility of unconventional policies; and (2) should April inflation disappoint, the ECB will step into unconventional territory. In our view, most data since the last ECB meeting have evolved in line with the ECB March projections, which should not warrant any policy actions yet.
EUR/AUD Levels
Spot is presently trading at 1.4920, and next resistance can be seen at 1.4933 (Daily Classic R1), 1.4937 (Daily High), 1.4951 (Yesterday's High), 1.4964 (Weekly Classic PP) and 1.5002 (Daily Classic R2). Next support to the downside can be found at 1.4916 (Daily Open), 1.4914 (Daily Low), 1.4909 (Hourly 20 EMA), 1.4890 (Daily Classic PP) and1.4885 (Hourly 100 SMA).
Yesterday, markets took note of the statement from the RBA continued to indicate a period of stable rates.
EUR/AUD now awaiting ECB
Strategists at Bank of America Merrill Lynch explained that although March euro area inflation was on the low side of economic forecasts (at 0.5% yoy versus market expectations of 0.6%), they do not believe this will be enough to trigger ECB action yet as (1) most of the drag is coming from energy and (2) the ECB, like us, expects a rebound in April inflation on the back of disappearing energy drag and a boost from the Easter timing (late April this year, in contrast to March last year, affecting the services component).
However, we see two implications from the low March figure: (1) the ECB may try talking the euro down, highlighting the possibility of unconventional policies; and (2) should April inflation disappoint, the ECB will step into unconventional territory. In our view, most data since the last ECB meeting have evolved in line with the ECB March projections, which should not warrant any policy actions yet.
EUR/AUD Levels
Spot is presently trading at 1.4920, and next resistance can be seen at 1.4933 (Daily Classic R1), 1.4937 (Daily High), 1.4951 (Yesterday's High), 1.4964 (Weekly Classic PP) and 1.5002 (Daily Classic R2). Next support to the downside can be found at 1.4916 (Daily Open), 1.4914 (Daily Low), 1.4909 (Hourly 20 EMA), 1.4890 (Daily Classic PP) and1.4885 (Hourly 100 SMA).