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I’ve got my eye on this bullish euro setup, as the top economies in the region print their preliminary CPI reports.

Will the uptrend hold or fold?

Before moving on, ICYMI, yesterday’s watchlist checked out a short-term channel setup on USD/JPY. 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:

New Zealand trade deficit narrowed from 691M NZD to 392M NZD

Japanese preliminary industrial production ticked 0.3% higher vs. 0.5% forecast

Japanese retail sales rose 0.9% vs. expected 0.3% gain, previous 0.9% drop

New Zealand ANZ business confidence index dipped from -41.9 to -42.0 in April

Australian Q1 import prices rose 5.1% vs. 7.1% forecast, 5.8% previous

BOJ kept interest rates on hold at -0.10% as expected, kept 10-year JGB unchanged

BOJ head Kuroda: Better for yen to be stable and reflect fundamentals

Spanish flash CPI slipped from 9.8% to 8.4% vs. 9.1% forecast

Spanish unemployment rate climbed from 13.3% to 13.6% vs. 13.0% estimate

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. advance Q1 2022 GDP at 12:30 pm GMT
U.S. advance GDP price index at 12:30 pm GMT
U.S. initial jobless claims at 12:3o pm GMT
Australian quarterly PPI at 1:30 am 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

EUR/AUD 1-hour Forex Chart

EUR/AUD 1-hour Forex Chart

Euro traders might be eager to price in expectations for the region’s flash CPI readings due later in the week. After all, analysts are expecting to see a pop higher that might spur hawkish ECB bets.

How are the numbers looking, though?

So far, inflation data from Spain has been disappointing and Germany is also slated to print a dip in price pressures. This might be enough to take EUR/AUD down to the rising trend line visible on its hourly time frame.

This support area is just slightly below the 61.8% Fibonacci retracement level, which coincides with the 200 SMA dynamic inflection point and 1.4700 major psychological mark.

The 100 SMA is above the 200 SMA to suggest that the uptrend is more likely to resume than to reverse. In that case, EUR/AUD could soon make its way back up to the swing high at the 1.5050 minor psychological level.

Stochastic isn’t so sure about that, as the oscillator is turning south without even reaching the overbought zone. This hints that sellers aren’t letting up so easily, possibly even going for a break lower.

If that happens, better be ready to catch a reversal from this uptrend!