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EUR/AUD: 1.4250-1.46 box to trade near future

FXStreet (Bali) - EUR/AUD has been trading under pressure in the last 24 hours, accumulating over 0.5% in losses, after testing bids as low as 1.4320/25 before a decent bounce towards current price at 1.4370/75.

Yesterday's RBA policy meeting, which turned out to be a non-event as widely expected, continues to flag the undesirably high AUD level, with the statement suggesting that the RBA expects the currency's value to be adjusted lower overtime, in order to reflect the significant decline in commodity prices. Despite the minor jawboning, fast money piled into AUD longs, in line with the short term bullish momentum.

At the end of the day, the Euro ended up under-performing against the Australian Dollar, with a cluster of offers at 1.2650/2700 in EUR/USD disallowing the single currency to make greater progress against the AUD/USD, which enjoyed a cleaner run up to test 0.8830 key resistance, with some sizeable stops reported above.

Technically, EUR/AUD may see further dips, yet the bullish dynamic should eventually re-take control, following the vigorous recovery off 1.38 lows from early Sept. Since both currencies remain broadly weak, the topside may continue to be limited by 1.46, a flip zone that was successfully defended by sellers since broken back in June this year.

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