EUR/AUD is slightly higher today but technical analysts at Citi say the pair is poised to fall over the coming month.
They target the confluence of the 55-day moving average and the 50% retracement of the gains since April. Eventually, they say the pair could drop as low as the 200-day moving average, which is currently at 1.2779.
They say the gains will largely come from euro weakness on rising periphery spreads but say AUD short squeezes could also be a factor.
I think it’s too early to be on an AUD bounce but the Australian dollar is beginning to form a nice base around 0.9200.
