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Has EUR/AUD Double Topped?
In a race to the bottom the Aussie has been leading the euro over the summer as the massive collapse in commodity prices and the slowdown in Chinese economy trumped all the bad news of Greek bailout and the anemic economic growth in the EZ. In others words while the euro slid lower, the Aussie actually collapsed hitting multi year lows as it broke the 7300 level.
The net result is that EUR/AUD actually managed to stage a massive rally as the euro outperformed on a relative basis. Now however the odds may have turned as the Aussie appears to be making a near term bottom despite the trouble in Asia while euro struggles to trade above the 1.1200 level. One reason is that the market is convinced that the RBA will not cut rates any further until possibly 2016. That would preserve the interest rate differential towards the Aussie a provide new buying opportunities for carry traders.
On Monday night the market will get a glimpse of the RBA minutes and if they confirm that the RBA intends to remain stationary for the foreseeable future then the Aussie could rally further and confirm that the 1.5250 area is a double top