Trading Opportunities: AUD/EUR Pair Analysis (AUD/EUR)

Why the Australian Dollar Euro Attracts Investors

The cross between the Australian dollar and the euro presents an interesting opportunity in the currency markets. Although technically classified as a minor pair in Forex for not including the US dollar, its behavior has proven to be predictable and highly profitable. What makes it especially attractive is the combination of high liquidity with low volatility, supported by robust international trade between Australia and the Eurozone.

Unlike other minor pairs, the AUD/EUR or EUR/AUD enjoys a solid trading relationship that generates sufficient transaction volume, allowing for competitive spreads and cleaner executions for traders.

Understanding Currencies: Fundamentals of the Australian Dollar and Euro

The Australian Dollar (AUD) has been legal tender in Australia since February 1966, replacing the Australian pound. It also circulates in territories such as Christmas Island, Cocos Islands, Nauru, and Norfolk Island. The currency is characterized by its polymer banknotes (5, 10, 20, 50, and 100 AUD), technology that prevents counterfeiting and increases durability.

The Reserve Bank of Australia is responsible for setting official exchange rates. To contextualize its international value, as of November 30, 2022, the parity was 1 AUD = 0.67 USD.

The Euro (EUR) represents the second most important currency worldwide, officially used by 19 of the 27 European Union members. Although it adopted its name in 1995, banknotes and coins circulated starting in 2002. The European Central Bank, along with the European Commission, defines the monetary policy of the eurozone.

On the same date, the EUR/USD exchange rate was 1 EUR = 1.04 USD, reflecting the euro’s strength in international markets.

Dynamics of the AUD/EUR Pair: What You Need to Know

The current quote of the pair places the euro significantly stronger: 1 EUR = 1.54 AUD as of November 30. This means approximately 154 Australian dollars are needed to obtain 100 euros, indicating the euro’s higher value.

A critical aspect for any trader is understanding how continental news impacts each currency separately. Statements from the European Central Bank and European economic events directly affect the euro’s price, while interventions by the Reserve Bank of Australia and Australian macroeconomic data influence the movement of the Australian dollar.

Temporarily, AUD tends to experience greater volatility during the Asian session, the euro during London, and both show movement when New York opens. This feature provides multiple trading windows for different types of traders.

Technical Analysis of the Australian Dollar Euro Pair

Examining the daily chart of AUD/EUR from January to November 2022, a consistent respect for traditional chartism is observed:

Price movement:

• Started bullish, reaching a high of 1.6228 in February
• Broke support at 1.53, encountering multiple resistances
• Fell to a low of 1.4282 in August
• Currently consolidating with signs of bullish reversal

Relevant technical indicators:

• Moving average crosses (50 and 200) confirm support/resistance levels
• Stochastic has generated multiple overbought and oversold signals
• Recent golden cross suggests bullish continuation in the coming months

The confluence of these signals provides entry points with high success probability when applied correctly.

Fundamentals Supporting the Pair: Trade Relations

Australia and the European Union maintain deep economic relations. For Australia, the EU is the second trading partner after China. Australian exports include mineral products, agricultural goods, and commercial services such as transportation and tourism.

Over 2000 European companies operate in Australian territory, generating over 500,000 jobs and billing close to 200 billion euros. Recently, both regions finalized a free trade agreement, further boosting the liquidity of the AUD/EUR pair.

Comparative economic data:

• ECB rate: 2.00%
• RBA rate: 2.85%
• Annual variation EUR/AUD: -2.1%
• 2022 range: 1.4282 (minimum) to 1.6228 (maximum)

Practical Strategies: Examples of Successful Trades

Analyzing EUR/AUD in medium to long-term positions reveals multiple opportunities:

A Death Cross in October 2021 indicated a sell, confirmed by support break at 1.53 during February 2022. Subsequently, three resistance levels provided short entry points:

• First entry: Weak, stochastic without overbought
• Second entry: Strong, stochastic in overbought + confirmed resistance
• Third entry: Optimal, including overbought, resistance, and long-term EMA

The third trade would have generated maximum gains, validating that patience and confluence of signals produce better results than rushed entries.

Recommendations Based on Your Trading Profile

For scalpers: Prioritize tight spreads, low commissions, and fast execution. Every pip and millisecond impacts profitability.

For swing traders: Evaluate overnight financing conditions (swaps), available leverage, and margins that allow multiple positions without liquidation risk.

For position traders: Similar to swing traders, but with greater emphasis on fundamental analysis and resistance to short-term noise.

General tips:

• Always start with a demo account until concepts are mastered
• Identify the maximum number of confluences before trading
• Follow the economic calendar of the European Central Bank and Reserve Bank of Australia
• Combine technical and fundamental analysis for more solid decisions
• Continuously learn even when trading with real capital

Conclusion: The Australian Dollar Euro as an Investment Opportunity

The AUD/EUR pair offers an enviable balance of liquidity, controlled volatility, and recognizable technical patterns. Robust trade relations between regions ensure consistent volume, while technical and fundamental analyses provide reliable trading signals.

Although few brokers offer this cross compared to major pairs, its accessibility has significantly improved. For traders willing to complete bilateral analysis of both economies, the Australian dollar euro represents a profitable alternative within diversified Forex strategies.