March 20, 2023 23:26 GMT
AUD/EUR: 20-Day EMA Caps Recovery
AUD/EUR has rallied ~2% off cycle lows seen in early March, the 20-Day EMA ($0.6299) has capped gains in recent dealing.
- Rate differentials, observed via 2-year swap rates, have eased recently, from -27bps, the peak observed on the 7 March to -60bps, which has likely helped cap upside in the cross.
- Bulls look to target a break of the 20-Day EMA ($0.6299), from there the 50% retracement of Jan-Mar bear leg at $0.6361 presents as the next target.
- On the downside is $0.6169, the 2023 low, then $0.60 round number support are the targets for bears.
Fig1: AUD/EUR Daily Spot/EMAs
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