Strong Resistance for EUR/AUD
As the European Central Bank made a rather firm statement at last week’s meeting, the Euro climbed higher against every major currency. The EUR/AUD cross was trading at 0.3%, but it was still trading close to the recent peak.
At the 1.6150-1.6220 area – where the last few highs took place – appears to be fairly strong resistance. After the rally a few days ago, traders made some gains in this area. If the Euro moves above this resistance, an up-trend may be asserted.
The support is thought to be around 1.59, however. We might witness more consolidation soon.
Are Higher Interest Rates Feasible for the US?
Much has been uttered about how the Fed cannot raise interest rates for various reasons. One justification that is mentioned plenty is the inability of the government to pay larger interest payments. However, this seems inaccurate.
Ultimately, the government distributes its own currency – and can afford anything in theory (using Fed money). That said, it’s entirely possible that the dollar could become diminished in its buying power. This is far from ideal.
Meanwhile, high interest rates could produce more income throughout all Fixed Income systems. What’s more, it’s worth pointing out that more income usually results in bigger tax revenue.
A Current Analysis of the EUR/USD Pair
EUR/USD stabilizes above 1.14400 after pullback at the start of the week. The session ended with a round to 1.1455-50 early Tuesday on the Asian session.
Despite veiled bullish divergence in the RSI daily chart, the currency pair continues to bounce above 100 DMA. Furthermore, the positive price formation is one of higher lows that the RSI prints and the quote prints lower highs.
The pair of EUR/USD could now face an imminent obstacle. It is a horizontal resistance zone nearing three months old at 1.480-85. If they see lows at 1.1525 in October and November, buyers of the pair may be troubled.
EUR/USD bears would be directed towards 1.1325 and 50 DMA levels if the daily close is below the 100-DMA at 1.1420. The September resistance line is nearing 1.1300 and will limit the pair. EUR/USD currently is consolidating its losses in 2021.