EUR/AUD Hits Major Support at 1.61 Amid EU Energy Concerns

The EUR/AUD currency pair is testing its major support level at around 1.61, according to technical analyst Christopher Lewis of DailyForex. The euro has been drifting lower against the Australian dollar over recent sessions, and this trend continues as it approaches the critical support area.

The 1.61 level extends down to 1.60, which is a significant area of major support in past price action. If the market were to bounce from here, it would simply be continuing what has been seen before. However, Lewis believes that one of the biggest problems facing the euro is the potential for energy shortages in the European Union this winter.

The Stochastic Oscillator suggests an oversold condition and a moving average crossover, which could indicate a bounce. However, if this does not happen, it would be a major sign of where the market may go next. Lewis thinks that if the support level is broken through, the euro could fall to the downside underneath 1.60.

The pair has been in a downtrend for some time and continues to see questions about risk appetite. If gold were to receive a bid, it could make this even more bearish, as money may start running to Australia as a proxy. The 1.60 level is significant because it marks the bottom of an overall consolidation area that has been in place since mid-2023.