Daily Forex News and Watchlist: EUR/AUD

EUR/AUD is finding support from a short-term trend line ahead of China’s data dump.

Can the pair extend its uptrend in the next trading sessions?

Before moving on, ICYMI, yesterday’s watchlist checked out GBP/JPY’s potential resistance area ahead of the U.K.’s December jobs report. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

New Zealand’s NZIER Quarterly Survey of Business Opinion (QSBO) index for Q4 2023 jumped from -52 to -2 thanks in part to increased demand, easing of labor shortages, and easing inflation pressures

Australia’s Westpac consumer sentiment dipped by 1.3%, down from 82.1 to 81.0 in January; “Australian consumers remain under intense pressure as the surging cost of living, materially higher interest rates and rising tax weigh heavily on incomes”

Japan’s producer prices in December: 0.0% y/y (-0.3% y/y forecast, 0.3% y/y previous)

Financial Times cited “traders” and that Chinese authorities have told some institutional investors not to sell stocks

Germany’s December inflation rate confirmed at 3.7% y/y  (5.9% y/y in 2023)

U.K.’s December labor market reports support potential BOE rate cuts: Jobless claimants rise from 0.6K to 11.7K; Three-month average wages slow down from 7.2% to 6.5% (6.8% expected); Unemployment steady at 4.2%

Price Action News

Overlay of USD vs. Major Currencies

Overlay of USD vs. Major Currencies Chart by TradingView

Thanks to a lack of fresh top-tier catalysts in the Asian and early London session trading, the markets focused on the European Central Bank (ECB) members lowkey speaking against premature easing of their monetary policies.

The adjustment of the markets’ interest rate cut bets, combined with escalating tensions in the Middle East, inspired a risk-averse trading environment that boosted the safe-haven U.S. dollar against its major counterparts.

USD is trading in the green across the board, printing the most gains against AUD and NZD while printing the least pips against CAD, EUR, and CHF.

Upcoming Potential Catalysts on the Economic Calendar:

Germany’s ZEW economic sentiment at 10:00 am GMT
Eurozone’s ZEW economic sentiment at 10:00 am GMT
Canada’s housing starts at 1:15 pm GMT
Canada’s inflation reports at 1:30 pm GMT
U.S. Empire State manufacturing index at 1:30 pm GMT
BOE Gov. Bailey to give a speech at 3:00 pm GMT
FOMC member Christopher Waller to give a speech at 4:00 pm GMT
China’s data dump at 2:00 am GMT (Jan 17)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action!  ️

EUR/AUD 15-min Forex

EUR/AUD 15-min Forex Chart by TradingView

As mentioned above, ECB members recently made efforts to shoot down speculations of interest rate cuts in the foreseeable future.

Meanwhile, risk assets like AUD are taking hits from escalating geopolitical tensions in the Middle East, shifting central bank biases, and China’s growth and financial markets concerns.

This probably factored in EUR/AUD making higher highs and higher lows since late last week.

Can the pair maintain its uptrend?

Aside from overall risk sentiment, China’s data dump during the Asian session may influence the pair’s trends. Remember that we’ll see reports such as China’s GDP, industrial production, retail sales, fixed asset investment, and unemployment rate.

Disappointing economic reports could accelerate growth concerns for the world’s second-largest economy and draw in more AUD sellers.

EUR/AUD may see more bullish candlesticks from its current area that already lines up with the R1 (1.6480) Pivot Point line and a trend line support.

A fundamental boost at a short-term support zone could take the pair to the 1.6520 previous high if not the R2 (1.6530) Pivot Point resistance line.

Of course, we should also keep close tabs on potential catalysts, such as BOE Gov. Bailey’s speech, Canada’s inflation data, and FOMC member Waller’s speech in case they move the needle for overall risk sentiment.

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top