Will today’s European PMI releases give the euro an edge over the Australian dollar?
Here are the top headlines during the Asian session to help you shape your next trades:
- HK and Chinese markets out on holidays
- Tokyo Stock Exchange suspends day’s trade after worst-ever system glitch
- Oil prices rise after EIA reports small crude draw
- Fed’s Kashkari expects continued economic recovery but only in a ‘grinding’ fashion
- Fed’s Bowman sees bumpy recovery, warns on asset prices
- AiG: Australian manufacturing contracts in September
- Japan’s factories suffer record 17th month of declining activity
- Japan business sentiment perks up as hit from pandemic begins to ease
- House delays vote on $2.2 trillion coronavirus stimulus bill to allow more time for talks
- Japan ruling party heavyweight says to consider ‘large-scale, bold’ spending package – Nikkei
- Dollar loses ground on hopes for compromise on U.S. stimulus
Upcoming Potential Catalysts on the Economic Calendar:
- Switzerland’s CPI and retail sales at 6:30 am GMT
- Spain’s manufacturing PMI at 7:15 am GMT
- Switzerland’s manufacturing PMI at 7:30 am GMT
- Italy’s manufacturing PMI at 7:45 am GMT
- France’s final manufacturing PMI at 7:50 am GMT
- Germany’s final manufacturing PMI at 7:55 am GMT
- Eurozone’s final manufacturing PMI at 8:00 am GMT
- U.K.’s final manufacturing PMI at 8:30 am GMT
- Eurozone unemployment rate at 9:00 am GMT
- U.S. Challenger job cuts at 11:30 am GMT
- U.S. core PCE price index at 12:30 pm GMT
What to Watch: EUR/AUD
EUR/AUD is consolidating in a tight range around the 1.6340 level that served as resistance in the first half of September.
Today’s eurozone PMI reports may help tell us where EUR/AUD is going next.A risk-friendly trading environment and more headlines over a U.S. stimulus package could continue to strengthen the higher-yielding Aussie against the euro.
It also won’t help if today’s eurozone PMI reports, like other major economies, reflecting a slowdown of activity recovery from their lockdown numbers.
Meanwhile, euro bulls can look forward to upside surprises in today’s data releases. If we see better-than-expected economic prospects in the region, or if the passing of the next U.S. stimulus bill gets delayed again, then we could see some profit-taking from EUR/AUD’s losses.
EUR/AUD has an average volatility of just above 100 pips a day. This means that it could drop to the 1.6240 previous area of interest if euro bears regain their momentum, while an upside breakout could push EUR/AUD up to a 38.2% Fib move of its latest downswing.