Bias: Bearish-to-range-bound, current EUR/AUD sits below the 90-day average and in the lower half of the three-month range.
Key drivers:
Rate gap: The ECB has kept policy on hold for now, while the RBA has signalled possible tightening in 2026; this divergence tends to tilt EUR/AUD away from euro weakness and toward AUD strength.
Risk/commodities: Oil remains firm and volatile, lifting commodity currencies and providing AUD with a support cushion, while euro-area energy costs keep EUR under pressure.
One macro factor: China’s uneven rebound is tempering demand for Australian exports, softening AUD support and limiting upside for EUR/AUD.
Range: EUR/AUD is likely to drift toward the lower end of the recent range, with a slow grind and occasional tests of the range’s edge.
What could change it:
Upside risk: stronger-than-expected eurozone data and a hawkish tilt from the ECB would lift EUR and narrow the gap.
Downside risk: a clearer RBA tightening signal or stronger demand for Australian commodities could push AUD higher and push EUR/AUD lower.
