Analysts from TDS, consider that on Thursday the European Central Bank will announce a comprehensive easing package that will boost investors confidence, pushing EUR/AUD further to the downside. Key Quotes: “EURAUD maintains one of the highest correlations among G10 currencies to global equity markets. Not surprisingly, this relationship is particularly strong when considering European indices. We expect this relationship to be broadly stable for the foreseeable future, suggesting that EURAUD may be an effective proxy for the impact this week’s policy decision has on broader sentiment.” “Our base case calls for a comprehensive easing package. Even if this is less successful in generating broad-based EUR weakness, the boost to investor confidence should benefit risk assets in general.” “This suggests EURAUD has further room to run to the downside. Accordingly, we are biased to hold a small short position in this cross into the event. Our initial target for further downside is the 3 December low at 1.4358. Coincidentally, this is the low immediately preceding the ECB’s disappointing outcome that day. Our next objective is 1.4132, corresponding with a breakout level from May 2015.” “Resistance levels to monitor on the topside include 1.4700, 1.4735, and 1.4790. With the daily RSI already approaching oversold levels, any hint of a disappointment from Draghi would have us cover our short and rapidly consider flipping to EURAUD longs.” For more information, read our latest forex news.