Monday, October 7, 2024
12.5 C
London

EURAUD Forecast – Likely Reverse Amid Bearish Trend

Fx News – In today’s EURAUD forecast, we start with the latest economic updates from Australia, followed by a detailed examination of the EURAUD’s behavior on the 4-hour chart.

Australia’s Bond Yields and Inflation

Bloomberg—The yield on Australia’s 10-year government bonds recently dropped, reaching a seven-week low of below 4.4%. This decline mirrors a similar trend in the US, where bond yields have also fallen. The main reason behind this trend in the US is the recent comments from American policymakers.

These officials suggest a more cautious approach, indicating that the Federal Reserve might not increase interest rates further and could reduce them next year. Policymakers often make such statements as ‘dovish,’ which means they favor lower interest rates to stimulate economic growth.

In Australia, new economic data reveals some changes in inflation rates. The monthly inflation rate for October was reported at 4.9%, a decrease from September’s 5.6% and lower than the predicted 5.2%. This slowing down in inflation, especially in goods and travel expenses, significantly affects the bond yields. Generally, bond yields tend to increase when inflation rates are high as investors seek higher returns to offset the impact of inflation.

Adding to the mix is Michele Bullock, the Governor of the Reserve Bank of Australia, who recently highlighted a growing concern. She noted that domestic demand in Australia is increasingly pushing up inflation. She suggests that interest rates may need a “substantial” increase to manage this. This is crucial because central banks like the Reserve Bank of Australia often raise interest rates to cool down inflation by making borrowing more expensive and reducing spending and demand.

Investors and market analysts are now closely watching the situation. They estimate there’s about a 50% chance that the Reserve Bank of Australia will raise interest rates again next year. This estimation is important because it helps businesses and consumers prepare for potential changes in borrowing costs, impacting everything from mortgage rates to business loans.

EURAUD Forecast – Likely Reverse Amid Bearish Trend

The EURAUD pair dipped below the 78.6% Fibonacci retracement level during today’s trading. Despite this, the bears could not maintain lower prices, as indicated by a bullish engulfing pattern on the 4-hour chart, suggesting a potential reversal. This is also supported by the stochastic oscillator moving out of the overbought zone.

EURAUD Forecast - Likely Reverse Amid Bearish Trend
EURAUD Forecast – Likely Reverse Amid Bearish Trend – 4H Chart

However, the overall trend remains bearish unless the pair surpasses the 1.665 level (the 50% Fibonacci point). The present price movements, indicators, and candlestick patterns hint at a possible upward swing in EURAUD, targeting the 1.665 mark.

Should the pair close below the 78.6% Fibonacci level and stabilize, this EURUAD forecast bullish would become invalid.

Latest Analysis

Bitcoin Surges Past $63200 as Bulls Eye $66700 Target

FxNews—Bitcoin crossed above the $63,200 critical pivot and the...

Ripple Technical Analysis – Potential Reversal from $0.5

FxNews—Ripple (XRP) dipped from the 23.6% weekly Fibonacci retracement...

Litecoin Technical Analysis – Bulls and the $63 Frontline

FxNews—Litecoin trades bullish from $61.5, where the C wave...

Bitcoin Technical Analysis – The $63000 Pivot Explained

FxNews—The Bitcoin price is experiencing a pullback from the...

Ethereum Technical Analysis – Struggle at Major Resistance

FxNews—Ethereum is experiencing a pullback from $2,310 and tested...

Forex News

Latest Trends in Inflation: Insights from February CPI Report

Market News – The latest data from the Bureau...

US Government Bond 10Y Analysis

A significant observation is the current yield, which is approximately...

Asian Currencies Gain Amid Federal Reserve Speculation

Market News – Asian currencies experienced a surge on...

Asian Stock Market Boosted by Tech Sector

Market News—The Asian stock market rose on Thursday, largely...

Brazil Trade Surplus: Breakdown of Exports and Imports

Market News – In October 2023, Brazil’s trade surplus...

S&P TSX Composite Index – A Surge in Toronto Stock

Market News – On Wednesday, the S&P/TSX Composite index...

Market Basket News – Asia Awaits Fed & BoJ Decisions

Market News – At the start of the week,...

January Rollover of Brazil Currency Swaps

Market News – Brazil's central bank plans to start...
spot_imgspot_img