EUR/AUD
The euro – Australian dollar pair has been falling exceptionally sharply for a period of over two and a half years! This weakness is the result of the debt crisis in Europe and the excellent state of the Australian economy as well as high interest rate differences that have been increasing over the past few years in favor of Australia.
We have good reason to believe that such a technical correction could well begin in the near future. This is based on the temporary solution found for the European debt crisis and the calm that it produced. Also, the beginning of interest rate increases in the euro block should, according to forecasts, reduce the interest rate gaps between the countries. The minimum correction should push the pair towards the resistance level of 1.5870 Australian dollars to the euro. We can condition an entry into a buy position on a breakthrough of the trend line that accompanies the pair at around 1.3600 and that can be used as a trigger for an entry into a buy position.
