Breakout alert!
I’m seeing this tight consolidation pattern on EUR/AUD that might be a sign of big moves to come.
Which way will it go?
Before moving on, ICYMI, yesterday’s watchlist looked at EUR/NZD inflection points ahead of New Zealand’s jobs release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. JOLTS job openings up by 11.55M vs. projected 11.19M figure
New Zealand GDT dairy prices down by 8.5%
New Zealand employment change up by 0.1% as expected in Q1 2022
New Zealand unemployment rate unchanged at 3.2% as expected
New Zealand labor cost index up by another 0.7% as expected
Commodity prices in New Zealand slipped by 1.9% in April – ANZ
Australian retail sales jumped 1.6% vs. projected 0.4% uptick
Spanish unemployment change at -86.3K vs. estimated -75K figure
EU’s von der Leyen: We will phase out Russian oil in six months
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone retail sales at 9:00 pm GMT
U.S. ADP non-farm employment change at 12:15 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
FOMC statement at 6:00 pm GMT
U.S. President Biden to speak at 6:00 pm GMT
FOMC press conference at 6:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/AUD
With all the bombshells coming out of the U.S. economy today, I’m steering clear of dollar pairs for the time being!
Instead, I’ve got this comdoll cross on my radar because the triangle pattern is too good to pass up. Price is already hovering around the bottom of the formation, possibly considering a bearish break.
If that happens, EUR/AUD could tumble by the same height as the chart formation, which spans around 400 pips.
Technical indicators are giving mixed signals, though. The bearish moving average crossover suggests that support is more likely to break than to hold, but Stochastic looks ready to turn higher from the oversold region.
In that case, EUR/AUD might still bounce right back up to the top of the triangle around the 1.4900 handle.
I’m leaning towards more gains for the Aussie since the Land Down Under just printed stronger than expected retail sales data earlier on, following a more hawkish RBA decision this week.
