This euro pair has been moving sideways for more than a couple of months already, and it looks like a test of support is in order again.

Will it bounce or break this time?

Take a look at these inflection points on the 4-hour time frame!

EUR/AUD 4-hour Forex Chart by TradingView

Risk rallies from the U.S.-China framework agreed upon over the weekend appear to be keeping the commodity-related Aussie strongly supported ahead of the highly-anticipated Trump-Xi meeting.

In addition, stronger than expected Australian inflation data bolstered hawkish RBA expectations, dragging EUR/AUD below the area of interest at the middle of its range and putting it closer to the bottom near S3 (1.7600).

Can euro bulls still defend the long-term floor?

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the euro, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

The spotlight could shift to the upcoming ECB decision later in the week, as the central bank is likely to keep policy unchanged while reiterating their neutral to hawkish stance.

Keep your eyes peeled for reversal candlesticks around the range support, as a bounce could take EUR/AUD back to the upside targets at S1 (1.7770) near the moving averages then to the pivot point (1.7870) at the mid-range support-turned-resistance.

Should Aussie strength persist on positive global trade headlines, look out for a possible range breakdown to the next potential support at S4 (1.7500) which lines up with a major psychological level.

Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.

Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.