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EUR/AUD bears may be back in control after the bulls failed to break major resistance. Will the upcoming heavy round of economic updates keep the bears in control?

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a GBP/USD as it tests a major psychological area ahead of U.S. jobs 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: 15531.04 -1.02%
FTSE: 7037.47 -0.71%
S&P 500: 4297.37 +0.13%
NASDAQ: 14503.95 -0.17%
US 10-YR: 1.458% -0.022
Bund 10-YR: -0.203% 0.00
UK 10-YR: 0.721% +0.004
JPN 10-YR: 0.063% -0.006
Oil: 73.51 +0.72%
Gold: 1,771.30 +0.43%
Bitcoin: $34,882.25 -4.23%
Ethereum: $2,266.80 +1.94%

Fresh Market Headlines & Economic Data:

Dow rises 200 points, S&P 500 hits record high as Wall Street wraps up strong first half of 2021

CDC is leaving it up to states to set guidelines for mask wearing, director says

U.S. private payrolls rise 692,000 in June, easily topping expectations

U.S. pending home sales increase to highest reading for May since 2005

As housing boom begins to fizzle, weekly mortgage demand falls nearly 7%

Fed’s Kaplan says he wants taper to start ‘soon,’ be gradual

Oil rises on lower U.S. stockpiles, demand recovery

Lumber prices dive more than 40% in June, biggest monthly drop on record

U.S. dollar share of global reserves rises in Q1; euro share slips

Eurozone inflation drops below 2% in ‘temporary’ dip

In June 2021, French consumer prices increased by +1.5% y/y

France household consumption expenditure on goods bounced back sharply in May 2021 (+10.4%)

Swiss KOF Economic Barometer: 133.37 in June vs. 143.75 in May

Upcoming Potential Catalysts on the Economic Calendar

Australia Ai Group Manufacturing Index at 10:30 pm GMT
Australia Markit Manufacturing PMI at 11:00 pm GMT
Japan Tankan Manufacturing Index at 11:50 pm GMT
Australia Trade Balance at 1:30 am GMT (July 1)
China Manufacturing PMI at 1:45 am GMT (July 1)
Germany Retail Sales at 6:00 am GMT (July 1)
ECB President Lagarde speech at 7:00 am GMT (July 1)
Euro area Markit Manufacturing PMI at 8:00 am GMT (July 1)
BOE Governor Bailey speech at 8:00 am GMT (July 1)
Euro area Unemployment Rate at 9:00 am GMT (July 1)

What to Watch: EUR/AUD

EUR/AUD 1-Hour Forex Chart
EUR/AUD 1-Hour Forex Chart

On the one-hour chart above of EUR/AUD, we can see the bulls failed to break the strong resistance area around 1.5850, likely with the help of a weaker-than-expected read in Eurozone inflation this morning.

With this bearish turn at a major resistance area, this could draw in both technical traders into a short position, but also fundamental traders as well if the upcoming economic updates don’t come in the euro’s favor. 

Up ahead, we’ll get a slew of updates from both Australia and Europe, with the most notable ones being the Euro area manufacturing PMI update and unemployment update. If those two readings turn sour, today’s downturn in EUR/AUD may just be the start of a fresh move lower on the pair.

We’ll be looking out for that scenario to get bearish on EUR/AUD, and if it does play out, we feel that the potential reward-to-risk profile doesn’t make sense unless we can get in right at the 1.5850 handle or above.

If so, that’s a near two times the daily ATR move to the previous swing low at 1.5700, where we would likely see buying support again. If using the ATR as a stop guide, a 2:1 R:R is a very nice short-term reward that we could see before the end of the week if volatility remains high and if the euro updates are very weak.