The global currency markets are at a pivotal juncture, with two major forex pairs presenting contrasting technical pictures that could influence broader risk sentiment, including in cryptocurrency markets. The EUR/USD pair is testing critical nine-day exponential moving average (EMA) support near the 1.1850 level, a development market participants are closely watching as it often signals short-term directional bias for the world's most traded currency pair.
For EUR/USD, the 1.1850 zone represents a convergence of multiple technical factors. The nine-day EMA, currently at 1.1852, provides dynamic support. The Relative Strength Index (RSI) hovers near neutral territory, suggesting balanced pressure. Historical data shows this level has acted as both support and resistance recently. A sustained break below 1.1850 could trigger further selling toward 1.1820, while a successful defense might encourage a move toward 1.1900 resistance.
This technical battle unfolds amid diverging monetary policies between the European Central Bank (ECB) and the U.S. Federal Reserve. The ECB maintains its stance while monitoring inflation, whereas the Fed continues a data-dependent approach to interest rates. Mixed economic signals—Eurozone manufacturing expansion versus robust U.S. employment figures—add to the fundamental tension.
In contrast, the AUD/USD pair exhibits bullish momentum, trading above a rising 20-day EMA at approximately 0.6675. The pair has gained about 2.3% against the U.S. dollar since mid-January 2025 and is testing resistance near 0.6750. The Moving Average Convergence Divergence (MACD) indicator shows positive histogram readings, supporting the upward bias.
Fundamental drivers for AUD strength include a relatively hawkish Reserve Bank of Australia (RBA), which maintains its cash rate at 4.35%, contrasting with potential Fed rate cuts signaled for late 2025. Resilient demand for Australia's commodity exports (iron ore, lithium) from Asia, a strong trade surplus (AUD 12.4 billion in February 2025), and positive Chinese manufacturing data further support the currency.
Historical patterns show March has been favorable for the Australian dollar, with AUD/USD gaining in seven of the past ten years, averaging 1.8% appreciation. Commitments of Traders reports reveal a significant increase in net long positioning in Australian dollar futures, indicating growing institutional confidence.
Both scenarios highlight how technical developments in major forex pairs coincide with fundamental economic shifts and central bank policies. The outcome of these currency battles is significant as they influence global risk appetite, capital flows, and volatility—factors that historically correlate with movements in the broader cryptocurrency market.
