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With markets still focused on the coronavirus outbreak, I’m looking at this pullback opportunity to catch the AUD selloff against the euro.

Currency Snapshot:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • French flash GDP at 6:30 am GMT
  • German retail sales at 7:00 am GMT
  • Swiss retail sales at 7:30 am GMT
  • French consumer spending and preliminary CPI at 7:45 am GMT
  • Spanish flash GDP and CPI at 8:00 am GMT
  • Euro zone flash CPI estimates at 10:00 am GMT

What to Watch: EUR/AUD

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

The Aussie had a bit of reprieve from its earlier declines as data from China and the Land Down Under turned out mostly positive. However, there might be no stopping the surge in risk-off flows stemming from the global attention on the coronavirus outbreak.

With that, the higher-yielding commodity currency could be due to resume its slide soon, and EUR/AUD might enjoy some volatility from upcoming euro zone data.

Most releases are expected to show dips in growth and price pressures, possibly allowing this pair to retreat to the rising trend line support on the 1-hour chart. This coincides with an area of interest and the 50% Fib near the 1.6350 minor psychological mark.

Here’s MarketMilk’s volatility guide for EUR/AUD to guide you in setting exit levels:

EUR/AUD Volatility from MarketMilk
EUR/AUD Volatility from MarketMilk

A long position at 1.6350-1.6375 with a stop below 1.6300 could be enough to weather this pair’s average daily volatility and catch a bounce back to the swing high and beyond.