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EUR/AUD eyes ECB and RBA signals as RSI divergence lifts reversal odds
The pair is testing support around 1.6086, while markets price a 50.0% to 58.0% chance of an RBA hike in September after Australia’s Q2 GDP beat expectations.
Action Forex says the euro heads into the ECB meeting on September 9 to 10 with support for a more hawkish stance, with policymakers described as willing to raise rates again to offset inflationary effects tied to the Middle East conflict.
At the same time, the report notes the Australian dollar is benefiting from stronger data, after Q2 GDP grew 0.4% quarter on quarter, strengthening expectations that the RBA could resume tightening.
The article also points to the EUR/AUD chart, saying the pair has been trading within a steep descending trendline since mid August highs near 1.6441 and is now testing the confluence of that trendline with the 0 Fibonacci level near 1.6086, alongside a bullish RSI divergence.
Action Forex adds that a break above the descending trendline would give the divergence more technical credibility, potentially opening a path toward the 0.382 retracement near 1.6222, while rejection would keep sellers in control and expose fresh lows below 1.6086.