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A lack of top-tier reports scheduled means we should mind risk sentiment.

Will today’s moves inspire a break-and-retest move on EUR/AUD?

Before moving on, ICYMI, yesterday’s watchlist checked out GBP/AUD’s range amidst risk aversion flows. Be sure to check out if it’s still a valid trade!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

U.S. flash manufacturing PMI dips from 57.7 to 15-month low of 55.0 in Jan.

U.S. flash services PMI slows down from 57.6 to 18-month low of 50.9 in Jan.

AU NAB business confidence slides 24 points to -12 in Dec. as surge in coronavirus cases hits consumer spending and staffing

AU quarterly CPI accelerates from 0.8% to 1.3% (vs. 1.0% expected) in Q4 2021

AU annual inflation closer to middle of RBA’s 2% – 3% target range at 2.6% (vs. 2.3% expected)

AU trimmed mean CPI – RBA’s preferred inflation gauge – jumps from 0.7% to 1.0% (vs. 0.7% expected)

Upcoming Potential Catalysts on the Forex Economic Calendar:

Germany’s IfO business climate at 9:00 am GMT
U.K.’s CBI industrial order expectations at 11:00 am GMT
U.S. CB consumer confidence at 3:00 pm GMT
Australian markets out on Australia Day holiday (Jan 26)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: EUR/AUD

EUR/AUD 1-hour Forex Chart
EUR/AUD 1-hour Forex Chart

Concerns over the Fed’s tapering/tightening schedule have dragged on “risky” bets like the comdolls, which is probably why EUR/AUD has staged a solid upswing since last week.

The euro broke above a weeks-long range resistance this week but it looks like the bears stepped in around the 1.5950 area.

EUR/AUD is now trading closer to the broken range resistance as well as the 38.2% Fibonacci retracement of last week’s upswing.

Will EUR/AUD complete a break-and-retest pattern?

I’m not seeing top-tier reports scheduled in the next trading sessions so risk sentiment will likely dictate EUR/AUD’s price direction for another day.

If traders follow up on the risk-taking that started from yesterday’s late U.S. session trading, then we could see more AUD strength that could drag EUR/AUD to the 1.5750 area near the 100 and 200 SMAs.

If markets focus on the upcoming FOMC statement, though, or if yesterday’s risk-taking sees a reversal today, then EUR/AUD could bounce from its current levels and return to its intraweek highs.