Forex Flash: EUR/AUD strength hinges on European stability – Westpac

According to Sean Callow, an FX Strategist at Westpac, “The pair left its major EUR/AUD moving averages far
behind last month, however the
1.3100/1.3200 area should at least generate some congestion though most resistance levels don’t seem likely to prove especially strong if European political concerns subside, encouraging a resumption of EUR outperformance.”

Ultimately, “A solid multi-week resistance should emerge just ahead of the 1.3300 level, the 76.4 % retracement of the November 2011 – August 2012 decline.” he adds.
The EUR/AUD has spent a solid 13% of its trading days since the 1983 float below 1.3300. However, many of these were in 1983-1985 (using AUD/DEM). With the Eurozone likely to remain in recession for most – perhaps all – of 2013 in contrast to Australian GDP growth of 2.7%, the pair will remain historically weak.