EUR/AUD: Trading Opportunities in the Australian Dollar to Euro Pair

Understand the Pair Before Trading

When we talk about converting Australian dollar to euro in the currency markets, we face one of the most interesting but less explored currency pairs by beginner traders. The AUD/EUR cross (or its inverse EUR/AUD) represents the direct exchange between the Australian currency and the European currency without the need to use the US dollar as an intermediary.

Unlike major pairs that always include USD, this minor pair offers unique features: high liquidity derived from international trade between Australia and the European Union, moderate volatility that makes it accessible even for traders with controlled risk, and predictable trading flows according to the economic calendar of both regions.

As of November 30, 2022, the quote to exchange one Australian dollar for euro was 0.65 EUR, meaning 1 AUD equals 0.65 EUR or, inversely, 1 EUR requires 1.54 AUD. This relationship reflects that the euro is significantly stronger than the Australian dollar, a reality that directly impacts how we structure our trading strategies.

The Currencies Behind the Pair: AUD and EUR

The Australian dollar has been the official currency of the Oceanic country since 1966, replacing the Australian pound. Its introduction of polymer banknotes made it a global pioneer in anti-counterfeiting technology. Today, denominations of 5, 10, 20, 50, and 100 AUD circulate, backed by the Reserve Bank of Australia which sets the official exchange rates.

Meanwhile, the euro represents the second most relevant currency in the world after the US dollar. Adopted by 19 of the 27 European Union members since January 1, 2002, the EUR is controlled by the European Central Bank (ECB) in coordination with the European Commission. Its reach extends beyond Europe: approximately 60 countries and territories outside the EU use it as an official or reference currency.

The euro was originally manufactured with cotton, giving it a distinctive feel and superior security features. Its position as a reference currency in international transactions makes it a critical indicator of global economic health.

Why This Pair Deserves Attention in Your Portfolio

The trade relationship between Australia and the eurozone is deep and multifaceted. For Australia, the European Union is the second most important trading partner after China. Australian exports mainly include mineral products, agricultural goods, and specialized services such as transportation and travel.

This commercial connection translates into concrete market dynamics: over 2000 European companies operate in Australia, generating more than 500,000 jobs and billing nearly 200 billion euros annually. The current free trade agreement between both regions ensures constant currency flows, providing the EUR/AUD pair with the necessary consistent liquidity for safe operations.

From the Australian dollar to euro perspective, this means we have access to a pair with sufficient trading volume but without the over-exploitation of major pairs. The trading window expands considerably: AUD shows greater volatility during the Asian session, EUR during London, and both experience wide movements when New York opens.

Technical Analysis: Patterns That Work

During 2022, the EUR/AUD pair demonstrated strict respect for technical analysis principles. It started the year at 1.5657, reached highs of 1.6228 in February, experienced a significant correction down to lows of 1.4282 in August, and finished at 1.5317 on November 30 with an annual variation of -2.1%.

This movement reveals clear patterns: the Australian currency against euro showed a Death Cross in October 2021 that correctly signaled the change to a bearish trend. Subsequently, we identified supports and resistances that were consistently respected, with the 1.53 level acting as a recurrent bounce point.

By the end of 2022, we observed a Golden Cross (bullish crossover of the 50 and 200-day moving averages), three successive rejections at the same resistance level, and the breakout of that level with volume confirmation. These confluences indicated a bullish continuation in the following months.

The stochastic revealed multiple overbought and oversold conditions that provided low-risk entry opportunities if confirmed by price action at key technical levels. Few platforms offer the AUD/EUR pair directly; most facilitate EUR/AUD, simply requiring the inversion of trading logic (buy becomes sell and vice versa).

Economic Fundamentals Moving the Market

To trade intelligently with the Australian dollar to euro, monitoring the economic calendar of both jurisdictions is essential. The European Central Bank publishes data on employment, retail inflation, consumer confidence, and interest rate decisions. The Reserve Bank of Australia provides employment figures, inflation, trade balance, and governor statements.

Each three-star (high impact) event deserves special attention. For example, retail sales data showing -5.00% versus an expectation of -2.8% directly weakened the euro, creating bearish candles in EUR/AUD.

Current interest rates also define the pair’s dynamics: with the ECB at 2.00% and the Reserve Bank of Australia at 2.85%, long-term traders considered the rate differential to calculate the overnight financing cost (swaps).

Statements from central officials like Governor Lowe of the Reserve Bank of Australia generate unpredictable but exploitable volatility if you are prepared. The key is to know what to expect, how to interpret the results, and adjust positions before the market fully reacts.

Building Strategies According to Your Trading Profile

For scalpers seeking quick profits in the Australian dollar to euro market, spreads and commissions are critical. You will need a broker with ultra-fast execution and minimal bid-ask differences because each pip lost in costs directly reduces your profitability. The high liquidity of this pair favors this style.

If you practice swing trading, the focus shifts: emphasize technical confluences between moving averages, historical levels, and stochastic behavior. Your trades last days or weeks, so financing swaps become important. Verify that your broker offers competitive rollover rates.

Position traders with a quarterly or yearly horizon must master fundamental analysis and macroeconomics. Understand interest rate cycles in Europe and Australia, anticipate monetary policy decisions, and position months before market consensus recognizes them.

Regardless of your style, start with a demo account. Test different indicators, adjust parameters, and learn to recognize when enough signals converge to justify a trade. Avoid speculating on news; wait for price confirmation. Never risk capital you cannot afford to lose.

Success Stories: Turning Analysis into Profits

The chart history of EUR/AUD during 2022 offers valuable lessons. The October 2021 Death Cross clearly identified the cycle change; traders who recognized this early could accumulate short positions in EUR/AUD (equivalent to long positions in AUD/EUR) without rush.

When the pair broke the 1.53 support in February, three successive sell opportunities emerged at resistance. The first lacked stochastic confirmation; aggressive traders could attempt it, but the risk was high.

The second opportunity showed clear overbought conditions in the stochastic coinciding with rejection at resistance. Here, the probability improved significantly. The third trade added an extra element: the long-term exponential moving average also acted as resistance. This confluence of three factors (stochastic, historical level, moving average) provided enough confidence.

The pair fell from 1.6228 to 1.4282, a movement of 1946 pips. The third trade captured most of this gain because it was executed closer to the maximum, rewarding patience over impatience. Those jumping at the first opportunity captured profits but sacrificed higher potential gains.

Risk Management: Protecting Your Capital

Never risk more than 1-2% of your account per trade. If your balance is 10,000 USD, the maximum risk per trade should be 100-200 USD. This allows you to tolerate several consecutive losses without devastating your capital.

Always place stop-loss orders. In the Australian dollar to euro pair, a reasonable stop could be placed 20-30 pips below your entry level in swing trades. Scalpers need tighter stops, close to 5-10 pips.

Take partial profits. If your initial target of 100 pips is reached, close 50% of the position in profit and let the rest run with a break-even stop. This mechanic ensures you at least captured gains while preserving exposure for larger moves.

Monitor correlations. AUD moves with commodity indices (especially metals), while EUR follows the euro index. Understanding these dynamics allows you to anticipate turns before they happen.

Consolidating Your Approach

The EUR/AUD pair, less popular than its major counterparts, offers exceptional opportunities for disciplined traders. Its liquidity guarantees clean execution, its volatility provides opportunities without being chaotic, and its 24/5 trading cycle aligns with multiple market sessions.

Combine rigorous technical analysis with correct interpretation of the economic calendar. Start with virtual money, learn to recognize confluences before risking real capital. Maintain humility: markets will always teach you something new if you are willing to learn.

The journey of turning Australian dollar to euro into tangible profits requires patience, discipline, and continuous education. But for those willing to invest the necessary time, this minor pair becomes one of the most profitable on the Forex platform.