Currency Pairs AUD EUR – Practical Guide to Trading Forex between Australia and Europe

Introduction: Why the Australian Dollar and the Euro Make an Attractive Pair

The cross between the Australian dollar and the euro represents an interesting alternative in the currency markets, classified as a minor pair within Forex since it does not include the US dollar. However, this financial instrument has features that make it particularly attractive to investors: it offers high liquidity derived from intense bilateral trade between Australia and the European Union, as well as moderate volatility that facilitates the execution of both short-term and long-term strategies.

Characteristics of the Australian dollar (AUD)

The AUD has been Australia’s official currency since 1966, when it replaced the Australian pound. It is also currently circulated in Christmas Island, Cocos Islands, Nauru, Norfolk Island, and Heard and McDonald Islands.

The Australian currency is notable for being a global pioneer in the use of polymers in its manufacturing. Circulating banknotes are of 5, 10, 20, 50, and 100 dollars, while coins include denominations of 1 and 2 AUD plus fractional cents. This polymer material provides greater durability, water resistance, and significantly hinders counterfeiting.

According to recorded quotes, the AUD to US dollar parity was around 1 AUD = 0.67 USD in November 2022. The Reserve Bank of Australia is the institution responsible for setting official exchange rates. An important administrative aspect is that cash transactions are rounded to the nearest 5 cents.

The euro (EUR) as a supranational currency

The euro is the second most important currency worldwide, used by 19 of the 27 European Union members. It was adopted in physical form on January 1, 2002, replacing various national currencies and the former European Currency Unit (ECU).

Only eight EU member states do not use the EUR: Bulgaria, Croatia, Denmark, Hungary, Poland, Czech Republic, Romania, Sweden, and the United Kingdom. Beyond Europe, approximately 60 additional countries and territories, including Andorra, also adopt this currency.

The European Central Bank (BCE), in coordination with the European Commission, defines the monetary policy of the eurozone. Circulating banknotes include denominations of 5, 10, 20, 50, 100, 200, and 500 euros, with coins of 1, 2 euros and fractions up to 50 cents. Unlike the AUD, euro banknotes are made of cotton, providing a distinctive texture.

The EUR to US dollar exchange rate was approximately 1 EUR = 1.04 USD in November 2022.

Exchange dynamics: AUD EUR in practice

Direct conversion between both currencies eliminates the need for intermediaries. According to late November 2022 records, the equivalence was approximately 1 AUD = 0.65 EUR, which implies 1 EUR = 1.54 AUD. This relationship shows that the euro has a higher relative value, requiring 154 units of Australian dollars to obtain 100 euros.

When trading this pair, it is essential to recognize that both currencies respond to economic dynamics from geographically different regions. Statements from the European Central Bank, economic reports from the eurozone, data from Australia, and decisions by the Reserve Bank of Australia directly impact the quote. The most volatile sessions occur during the Asian opening (para AUD) and the London session (para EUR).

Trade relations supporting liquidity

The European Union is the second most important trading partner of Australia, after China. Australians mainly export mineral products, agricultural goods, and services including transportation and tourism.

Over 2,000 European companies operate in Australian territory, generating over 500,000 jobs and billing approximately 200 billion euros annually. Both regions have had a free trade agreement for years, facilitating these trade flows and creating a solid demand and supply base in the exchange markets.

Technical assessment of AUD EUR behavior

A daily chart analysis of the EUR/AUD pair during 2022 shows that the quote respects the principles of chart analysis applicable to any major Forex pair.

Throughout the year, the pair opened at 1.5657, reached a high of 1.6228 in February before reversing. It then crossed a support level at 1.53, rebounded against this resistance three times, and continued descending to touch lows of 1.4282 in August. By late November, it was positioned at 1.5317.

The 50- and 200-period moving averages identify bounce zones and facilitate decision-making. The stochastic indicator shows multiple overbought and oversold conditions. A bullish crossover of moving averages (Golden Cross), along with resistance breakouts and subsequent rebounds at the same level, suggest upward continuation in the following months.

Fundamental factors influencing the pair

Fundamental analysis requires monitoring the economic calendar of both central institutions. Events with significant impact (classified with three stars or higher) include retail sales data, governors’ speeches, inflation reports, and monetary policy decisions.

For example, when Germany reported -5.00% annual retail sales versus forecasts of -2.8%, the daily candle of the pair showed immediate bearish movement. Announcements from the Governor of the Reserve Bank of Australia also generate volatility, although without known pre-anticipated levels.

The interest rate differential is also relevant: the ECB maintained rates at 2.00%, while Australia operated at 2.85%, influencing carry trade decisions.

Trading strategies: Practical examples

A position trading approach on the daily chart identified multiple entry opportunities. A bearish crossover of moving averages (Death Cross) in October 2021 signaled the start of a downtrend. Subsequent support breaks at 1.53 during February 2022 generated three potential sell points at subsequent resistance levels.

The most reliable entry coincided with stochastic overbought conditions and an intersection with the long-term exponential moving average acting as a rejection level. Traders who waited for the third confirmation achieved the best returns, demonstrating that patience in validating confluences multiplies success probabilities.

Recommendations based on trader profile

For beginner traders: Start with demo accounts, experiment with different indicators and strategies, familiarize yourself with concepts using virtual money before trading real capital.

For scalpers: Consider tight spreads, competitive commissions, and fast execution from the broker. Every pip and millisecond affects profitability.

For swing and position traders: Review policies on rollover swaps, available leverage, and required margins to sustain multiple positions.

General recommendations: Seek maximum confluences before placing orders; more coincident signals increase success probabilities. Avoid emotional speculation, improve both technical analysis and economic calendar interpretation. Continuous learning remains valid even when trading with real capital.

EUR/AUD performance data in 2022

Final operational considerations

Few brokers actively offer the AUD/EUR pair, considering the euro dominant and direct exchange to Australian dollars less probable. However, trading EUR/AUD in the opposite direction yields equivalent results, though it is not recommended to do both simultaneously.

The Australian dollar euro proves to be a viable instrument for diversified Forex portfolios, provided that rigorous analysis combining technical and fundamental perspectives with disciplined risk management is applied.