Top tier Aussie economic data is right around the corner, making the price action in EUR/AUD one to watch for potential opportunities to play the downtrend.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at the uptrend in USD/JPY ahead of U.S. data, 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: 15599.23 +0.36%
FTSE: 7222.82 +0.25%
S&P 500: 4566.48 +0.47%
NASDAQ: 15226.71 +0.90% US 10-YR: 1.634% -0.021
Bund 10-YR: -0.116% -0.003
UK 10-YR: 1.14% -0.001
JPN 10-YR: 0.1% +0.006 Oil: 83.45 -0.37%
Gold: 1,808.10 +0.66%
Bitcoin: $62,742.50 +3.43%
Ether: $4,195.29 +3.74%
Cardano: $2.14 +0.99%
Fresh Market Headlines and Economic Data:
U.S. New home sales surge 14% in September; house price growth likely peaked
U.S. consumer confidence index gains 4 pts to 113.8 in October
Richmond Fed Manufacturing index for October rises to 12 vs. -3 in September
Oil rises with traders awaiting data on U.S. supply levels
Aramco warns world’s spare oil supplies are falling rapidly
Raw material supply problems hurt German industrial exports – Ifo
Valkyrie files application for leveraged bitcoin futures ETF
FDA panel recommends Pfizer’s low-dose Covid vaccine for kids ages 5 to 11
U.K. serious covid cases hit levels last seen in March
Upcoming Potential Catalysts on the Economic Calendar
New Zealand Trade Balance at 9:45 pm GMT
Australia CPI at 12:30 am GMT (Oct. 27)
China Industrial Profits at 1:30 am GMT (Oct. 27)
Germany Consumer Climate at 6:00 am GMT (Oct. 27)
France Consumer Confidence, PPI at 6:45 am GMT (Oct. 27)
Euro area Money Supply, Private Loans at 8:00 am GMT (Oct. 27)
France Unemployment Claims, Jobseekers at 10:00 am GMT (Oct. 27)
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
It’s easy to see in the one hour chart above that the bears have been in solid control of EUR/AUD, but are we getting signs of a short-term bounce ahead?
Well, we’ve got a bullish divergence pattern forming as stochastic is making higher ‘lows’ vs. lower ‘lows’ in price, and volatility may pick up quickly with the release of the latest consumer price inflation data from Australia very soon.
Expectations are for another signal that prices are rising at a fast pace, forecasted this time for an 0.8% rise in the last quarter. If we see the read come out higher-than-expected, that could bring in short-term buyers to the Aussie, and possibly enough selling pressure in EUR/AUD to break the current support area around 1.5430.
Of course, we’ve got to consider a short-term Aussie sell off in that scenario as well as traders may take profits from that strong move lower from 1.5600 to 1.5430 over the last two trading sessions. If that reaction does occur on positive Aussie CPI data, then we’ll be on the lookout for bearish reversal patterns around the Fibonacci retracement area/minor support area around the 1.5500 major psychological handle.
In either case, remember that the daily average true range is right around 100 pips, so a pop higher beyond that range and/or a break above the falling trendline above is likely an invalidation signal that bears are still in control. Plan your trade structures accordingly to manage your maximum risk.
