We’ve got a heavy schedule of business sentiment updates from Asia and Europe, making the price action in EUR/AUD one to watch for a potential short-term setup.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at AUD/JPY after the RBA event, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
DAX: 15555.08 -0.09%
FTSE: 7105.72 +0.34%
S&P 500: 4423.16 +0.82%
NASDAQ: 14761.29 +0.55% US 10-YR: 1.176% +0.004
Bund 10-YR: -0.485% -0.003
UK 10-YR: 0.517% -0.004
JPN 10-YR: 0.003% +0.001 Oil: 70.64 -0.87%
Gold: 1,813.80 -0.46%
Bitcoin: $37,947.64 -3.13%
Ethereum: $2,460.45 -5.44%
Fresh Market Headlines & Economic Data:
Dow climbs more than 200 points, S&P 500 closes near record as industrial stocks rise
U.S. factory orders beat expectations in June; business spending on equipment solid
A hawkish Bullard sees more volatile economic “regime” emerging in U.S.
Fed’s Bowman: ‘More work to be done’ on jobs recovery
Oil extends losses in volatile trade as Delta variant angst spreads
Turkish inflation jump wipes out most of real interest rate; Annual inflation accelerates to 18.95%
BOK minutes indicate growing support for rate hike this year
Delta variant has spiked Covid-19 deaths in Africa by 80% in one month, WHO says
CDC shares ‘pivotal discovery’ on Covid-19 breakthrough infections that led to new mask guidance
Upcoming Potential Catalysts on the Economic Calendar
API Crude Oil Inventory Chang at 8:30 pm GMT
Australia Construction Index at 10:30 pm GMT
Australia Services PMI at 11:00 pm GMT
Japan Services PMI at 12:30 am GMT (Aug. 4)
Australia Retail Sales, RBA Chart Pack at 1:30 am GMT (Aug. 4)
China Services PMI at 1:45 am GMT (Aug. 4)
Euro area Services PMI 8:00 am GMT (Aug. 4)
Italy Retail Sales at 8:00 am GMT (Aug. 4)
U.K. Services PMI at 8:30 am GMT (Aug. 4)
Euro area Retail Sales at 9:00 am GMT (Aug. 4)
France Retail Sales at 9:00 am GMT (Aug. 4)
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: EUR/AUD
On the one-hour chart of of EUR/AUD, we a potential bearish setup in the price action as the pair broke a rising lows pattern, bounced, and found resistance again at the break. The area around the 1.6100 major psychological level is a strong area of interest, and it looks like the bears have chosen it as their jump off point for a potential fresh move to the downside.
But we’re not going to lean on that bias just yet as we’ve got a busy calendar ahead, mainly filled with business sentiment data ahead from both Australia and Europe. These are final reads for the month of July, so they’re not likely to post up any surprises, but because they are leading indicators, we should be on our toes in case we see divergences from preliminary reads.
So with the possibility of volatility picking up soon in EUR/AUD, we’ll be on a look out for short-term opportunities, most notably a potential short position if we see the scenario where Australia posts positive updates against net negative reads from Europe.
If the market retests the 1.6100 area and gives us another set of bearish patterns, this could draw in both technical and fundamental sellers in EUR/AUD. and if the market does pick up downside momentum, we could see a move to the previous swing low area around the 1.5950 level; a move well within the daily average true range of about 100 pips on EUR/AUD.
