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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

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Fresh Market Headlines & Economic Data:

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

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

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.