The EUR has been suffering for a while now against all other majors, with no different story with the AUD pair. The Greece sovereign debt crisis couldn’t spare the cross, making it to life low at below 1.4000. The $1trillion package manages to keep the financial markets on the positive side however did not attract investors to the EUR currency. This was primarily due to growing concerns for the Euro zone contributors like Portugal and Spain.Last week’s Reserve bank of Australia (RBA) decision raised the benchmark interest rate from 4.25% to 4.5% to keep its inflation figures under control. The Australian economy as such has been suffering from the surging commodity prices; hence the measure to increase the cash rate was in expected lines of the market. The Australian Retail sales for March rose by 0.3% which was below half of the expected figure of 0.8%. This could be merely due to the tightening policy of RBA, which has been raising rates for sixth consecutive time. The major impact was brought to the pair with Australian employment change which got accelerated by creating 33700 jobs against the expected figure of 27000 jobs. Australia’s Treasurer Wayne Swan also imparted confidence that the economy is in a better position to deal with European deficit crisis. Though the pair may not be a highly traded among the traders, the pair is making muted lows touching 1.4000 and below.
From the technical perspective, the pair is trading at Relative Strength Index (RSI) 30 which indicates the oversold position for EUR. There is no immense news coming in favor of the Euro zone, until then the EUR would continue to depreciate making new lows. Investors should be cautious on the pair as we could see further downside if it crosses the 30% of the RSI mark. Mohammed Rabbani
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