Today’s set of PMI reports from the euro zone got me looking at EUR/AUD’s 1-hour chart. Is the pair in for a reversal?
Fresh Market Headlines & Economic Data:
- Record number of townhouses, flats, and units consented in New Zealand in January
- AIG construction index improves from 41.3 to 42.7 in February
- New Zealand commodity price index down 2.1% in February
- Australia’s economy does better in December quarter but troubles ahead
- Japan services sector activity shrinks on coronavirus hit: PMI
- China’s services sector hasn’t shrunk this much in 14 years, Caixin PMI shows
Upcoming Potential Catalysts on the Forex Calendar:
- Germany’s retail sales at 7:00 am GMT
- Switzerland’s CPI at 7:30 am GMT
- Spain’s services PMI at 8:15 am GMT
- Italy’s services PMI at 8:45 am GMT
- France’s final services PMI at 8:50 am GMT
- Germany’s final services PMI at 8:55 am GMT
- Euro Zone’s final services PMI at 9:00 am GMT
- U.K.’s final services PMI at 9:30 am GMT
- Euro Zone’s retail sales at 10:00 am GMT
- U.S. ADP report at 1:30 pm GMT
What to Watch: EUR/AUD
The Fed’s surprise rate cut during the U.S. session got Asian session traders buying high-yielding bets like comdolls.
The euro, on the other hand, is having trouble maintaining its upside momentum against the dollar. And, with EUR/USD hitting key resistance levels on the daily time frame, I think a lot of euro bears will be watching closely.
EUR/AUD is a good place to look if you don’t feel like trading the dollar today. See, the pair is showing a potential head and shoulders pattern on the 1-hour time frame.
If today’s set of services PMI and retail sales reports surprise to the downside, then we could see EUR/AUD break below the 1.6890 “neckline” and 100 SMA and eventually test areas of interest like 1.6650 and 1.6430.
If the anti-dollar theme persists, however, and boosts EUR/USD enough to put upside pressure on EUR/AUD, then the pair could retest 1.7150 highs or even make new March highs.
If you’re not sure where to place your stops or your profit targets, then you’ll want to check out MarketMilk’s EUR/AUD volatility analysis for clues.
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