Key Points
- The Euro looks like formed a downtrend against the Aussie dollar, and may remain under pressure.
- There are two bearish trend lines formed on the hourly chart of the EURAUD pair, which are acting as a resistance.
- In the Euro Zone, the Producer Price Index (PPI) report was released by the Eurostat.
- There was a decline of 0.2% in the PPI in August 2016, compared with the forecast of a 0.1% rise.
EURAUD Technical Analysis
The Euro declined recently against the Aussie dollar and settled below the 21 hourly simple moving average to form a downtrend. There are two bearish trend lines formed on the hourly chart of the EURAUD pair, which are pushing the pair down.
There is a chance of a move towards the 1.236 extension of the last wave from the 1.4564 low to 1.4750 high at 1.4520, which may act as a support.
Selling rallies may be considered as long as the highlighted trend lines are intact.
Euro Zone Producer Price Index (PPI)
Today in the Euro Zone, the Producer Price Index (PPI), which is an index that measures the change in prices received by domestic producers of commodities in all stages of processing was released by the Eurostat.
The market was expecting a minor rise of 0.1% in the PPI in August 2016, compared with the previous month. However, the result was disappointing, as there was a decline of 0.2%. The report stated that it is “due to price falls of 0.8% in the energy sector and of 0.1% for intermediate goods, while prices remained stable for both capital goods and durable consumer goods and increased by 0.1% for non-durable consumer goods. Prices in total industry excluding energy remained stable”.
The Euro may remain under pressure versus the Aussie dollar, and we may witness a test of the 1.4520 support in the near term.
