EUR/AUD, GBP/AUD Under Bearish Technical Pressure Amid Descending Triangles

The EUR/AUD and GBP/AUD currency pairs are experiencing bearish technical conditions as they compress within descending triangles, a formation that suggests a resumption of their downtrend from last year's highs.

Relative rates continue to favor the Australian dollar against its European counterparts, with recent correlation analysis indicating that it's not just energy market movements driving this strength. Rather, relative rates, risk appetite, and industrial metals are doing most of the heavy lifting.

Germany serves as a proxy for the broader Eurozone in this context, showing an inverse relationship between relative rates and both pairs over 10- and 20-day windows. Similarly, S&P 500 futures, used here as a gauge for overall risk appetite, also display such an inverse relationship.