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EUR/AUD – On the Way to 1.5000?
From the price action in the EUR/AUD pair, you would never know that euro was having any problems with Greece. The cross is now within striking distance of multi-month highs and may push towards the key 1.5000 level soon. The reason for the strength has been twofold. The market is generally complacent about the Greek crisis believing that an 11th hour solution will be worked out and on the Aussie side the market is convinced that the RBA will continue to cut rates as the Chinese economy slows even further.
Tonight the market will get a chance to test its thesis as the HSBC Flash PMI data and the Flash PMI readings from Europe all hit the screen. Analysts are actually looking for a small bump of improvement in Chinese readings from 49.2 to 49.4, but if the data misses and sinks further contractionary territory the Aussie could get hammered. On the other hand if the EZ data remains above the 50 boom/bust line and even improves a bit, the euro could get a push higher leading to a surge in EUR/AUD that could take the pair to 1.5000
Technically the pair has very little resistance until the spike highs at 1.5250 and support lies at the 1.4300-1.4500 region.