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Euro and Australian catalysts lay ahead, making this consolidation in EUR/AUD probably one of the best setups to watch to start the new week.

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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.S. TIC Net Long-Term transactions at 9:00 pm GMT
  • New Zealand Westpac consumer sentiment at 10:00 pm GMT
  • Australia monetary policy meeting minutes at 2:30 am GMT (June 18)
  • Australia house price index at 2:30 am GMT (June 18)
  • ZEW Economic sentiment at 10:00 am GMT (June 18)
  • Euro area trade balance & CPI at 10:00 am GMT (June 18)
  • Canada manufacturing sales at 1:30 pm GMT (June 18)
  • U.S. building permits & housing starts at 1:30 pm GMT (June 18)

What to Watch: EUR/AUD

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

EUR/AUD has been in a pretty solid uptrend since the beginning of April, and recently made a strong move higher from 1.6100 to just about retest the 1.6400 ahead. But the pair has been in a tight 50 – 60 pip range over the last three sessions, setting up what could be a consolidation breakout play in the works.

And just ahead, we do have a few potential catalysts to helps support a short-term momentum move:  the RBA meeting minutes and housing data from Australia, and a slew of data points ahead from Europe. None of the events are really top tier market movers, but with a big surprise and the right combination of updates, it is possible to get EUR/AUD moving within it’s daily ATR of around 70 – 80 pips, and maybe even break out.

So for the bulls, ideally a retest of the support area around 1.6300 would give the best potential R:R and probability of success if the euro data is positive while Aussie data disappoints. But given today’s move is pretty strong, a break of the 1.6400 area should be considered if the data plays nice with price action.

For the bears, bad euro data or even more dovish commentary could bring in euro bears quickly, and if the market held 1.6400 strong after the Australian data, shorting there gives you a good potential R:R. And obviously, if we see a strong momentum move lower ahead of European session, a break of 1.6300 on weak European data/ strong Aussie data (or even positive trade news) would likely draw in sellers and still give a potentially good R:R given that the next support area may not hit until the May/June support area around 1.6100.