Introduction

The EUR/AUD pair has extended its bullish momentum, climbing firmly above the 1.81 level as Euro strength meets renewed Australian Dollar weakness. With macro fundamentals pointing to diverging monetary policies and technicals showing strong trend confirmation, traders are watching whether EUR/AUD can sustain its breakout and push towards higher resistance.

Fundamental Analysis

The Euro remains supported by expectations that the European Central Bank will maintain a restrictive policy stance amid sticky core inflation. Eurozone growth has stabilised, and German manufacturing is showing tentative signs of recovery, helping underpin sentiment.

By contrast, the Australian Dollar faces headwinds from slowing Chinese demand, weak commodity price performance, and a Reserve Bank of Australia signalling caution. While domestic inflation pressures persist, soft retail sales and housing market vulnerabilities weigh on AUD demand. This divergence strengthens the case for further EUR/AUD upside.

Sentiment Analysis

Positioning data shows EUR long exposure building steadily, while AUD has seen an increase in net shorts. Risk sentiment also leans against the Aussie, as global investors reduce exposure to commodity-linked currencies. News flows remain broadly supportive for the Euro, with markets treating it as a relative safe-haven against risk-driven currencies like AUD.

Technical Analysis

EUR/AUD daily charts confirm a strong bullish structure. Price has broken above the Ichimoku cloud, with the conversion line (1.7984) and base line (1.7916) acting as dynamic support. RSI at 68 signals strong momentum but is approaching overbought territory. MACD shows widening positive divergence, confirming bullish strength.

Key levels to watch:

• Support: 1.8000 (psychological), 1.7940 (cloud support)
• Resistance: 1.8200, followed by 1.8350 if momentum extends

A daily close above 1.82 would reinforce bullish continuation, while a failure to hold 1.80 risks consolidation.

Conclusion

EUR/AUD remains biased to the upside, driven by Euro resilience and Australian Dollar softness. Technical confirmation supports the bullish case, though traders should monitor RSI conditions for signs of overextension. Sustaining above 1.80 keeps the path open toward 1.82 and beyond.