It’s time for the monthly global PMI updates, which could get this sleepy market action in EUR/AUD moving and break the simple descending triangle consolidation pattern on the one hour chart.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11811.70 +1.38% FTSE: 7204.37 +1.11% S&P 500: 2925.94 +0.88% DJIA: 26214.65 +0.97% |
US 10-yr 1.579% +0.02 Bund 10-YR -0.675% +0.018 UK 10-YR: 0.471% +0.02 JPN 10-YR: -0.243% +0.002 |
Oil: 56.91 +1.39% Gold: 1511.80 -0.26% Bitcoin: 9934.00 -7.94% Etherium: 182.75 -7.10% |
Fresh Market Headlines & Economic Data:
- Trump says the Fed is the ‘only problem’ with economy, calls Powell ‘a golfer who can’t putt’
- Minneapolis Fed’s Kashkari says central bank should use forward guidance at next meeting
- Fed’s Daly says she doesn’t see a U.S. recession on the horizon
- Canada CPI rises +0.5% m/m, +2.0% y/y
- U.S. home refinancing activity hits three-year high: MBA
- Boris Johnson looks for an EU ally in Merkel as he seeks to save Brexit
- German Finance Minister: Brexit deal will not be changed
- Public sector net borrowing in July 2019 was in surplus by £1.3B, a £2.2B smaller surplus than in July 2018
- Germany sells a zero-percent 30-year bond for the first time
- The Conference Board Leading Economic Index for Australia increased 0.1% in June 2019 to 107.3
- RBNZ’s heavy rate cuts reduce need for unconventional policy – asst.governor
- New Zealand credit card spending -1.8% m/m; +5.0% y/y
- Brazil central bank president says room for more rate cuts
Upcoming Potential Catalysts on the Forex Calendar:
- FOMC meeting minutes at 7:00 pm GMT
- Australia flash manufacturing & services PMI at 12:00 am GMT (Aug. 22)
- Japan manufacturing PMI at 1:30 am GMT (Aug. 22)
- European manufacturing PMI at 9:00 am GMT (Aug. 22)
- ECB monetary policy meeting account at 12:30 pm GMT (Aug. 22)
- Canada wholesale sales at 1:30 pm GMT (Aug. 22)
- U.S. weekly unemployment claims at 1:30 pm GMT (Aug. 22)
What to Watch: EUR/AUD
As mentioned in the intro and in the “Upcoming Catalysts” section above, we’ll see the month PMI updates from around the globe, including the Euro area and Australia. These are leading economic indicators so traders could show some life to what has been a quiet week, likely due to traders waiting for the outcome of the event Jackson Hole Summit.
On the one hour chart above of EUR/AUD (which has a weekly ATR of over 200 pips), we can see the quiet market environment in full effect as the pair has been in a tight range between 1.6300 – 1.6400. Now it’s not likely that the upcoming PMI’s will cause a consolidation break UNLESS we get a big surprise in the numbers, and it’s likely the Euro area data will have the biggest affect on EUR/AUD.
If you’re a bear on EUR/AUD, the odds are in your favor at the moment with the downtrend momentum and today’s shift towards positive global risk sentiment. If we see a combination of both weak Euro area PMI’s and strong Aussie PMI’s push the pair below 1.6300, we could see a short-term momentum move lower to the 1.6200.
If you’re a bull on EUR/AUD, a weak Aussie update and strong Euro area update may bring in the buyers, and if it’s enough to break the falling ‘highs’ pattern, then we could see short-term upside momentum that would likely top out around 1.6450 – 1.6500 since it is counter to the longer-term trend. It is still a viable short-term play from a potential return-on-risk perspective if using the daily ATR of around 120 – 130 pips as your exit guide.