Is it a good time to buy EUR from Australian Dollars

EURAUD Forecast highlights

• EURAUD is long-term sideways pattern; a pattern reaffirmed recently
• Against this backdrop, the rate is envisaged to drop into its range support at 1.600 over time
• Watch to buy Euro near/at around this floor

How has EURAUD performed recently?

Europe is facing serious geopolitical issues. The new Trump administration is adopting new engagement rules on a wide range of topics, from Ukraine to trade deficits.

So far, the Euro has not buckled. Against the Aussie Dollar, the rate is trading within the well-defined range (1.700 to 1.580).

Chartwise, the rate is displaying neither bullish nor bearish momentum. The rate did affirm the floor at 1.600 a few weeks back, but this rebound has tapered off as prices encountered stiff selling pressure at 1.680.

Unless macro shocks emerge to disturb the equilibrium here, the rate is envisaged to continue drift sideways, with some downward bias.

Is it a good time to buy the Euros?

EURAUD is amidst a long-term range-trading pattern.

But the band is wide. 1.710 to the north and 1.58 to the south. Accordingly, if you need to buy the Euros this year, just wait for the rate to drop into the low 1.600.
Given the slow movement here , it may take some time before you can achieve a favourable rate. Hence if you need the Euros now, aim to buy some below 1.650.

Will the Euro get stronger?

The Euro in the past few years was relatively weak. One reason for this is was the sky-high inflation brought about by elevated energy costs.

While inflation rates have declined in 2024, thus bringing a respite to the economy, prices have yet to return to the pre-2022 levels. The European Central Bank (ECB) is cutting the policy rate to reinvigorate the Eurozone.
Against this context, the Euro may appreciate if real economic growth is strengthened by lower borrowing costs. But again, the pace and sustainability of this economic rebound is highly uncertain, as articulated by the ECB president recently.

For Australia, its 2025 outlook is challenging too. High inflation and interest rates are both weighing on economic activities. And so the central bank is trying to revive the economy with rate cuts in the near term.
Given the subdue outlook for both regions, that’s why EURAUD has been rangebound for some time. Unless one region displays relative economic outperformance, the exchange rate is envisaged to prolong the sideways pattern.

What is the EURAUD forecast in weeks?

The majority of EURAUD forecasters are expecting the rate to drop below the current level of 1.650.

In the next quarter or so, the rate is expected to drop into the 1.60 area before falling further (see below). No projections are observed above 1.700.

Are these forecasts too bearish on the Euro? Or is the market expecting a cyclical rally in the Aussie dollar?

We can’t be certain on either thesis. But technically the rate has room to fall until the range support near 1.600. So that should be the medium-term target.

Source: ExchangeRates.org.uk