With the ECB holding off of rate cuts and risk sentiment in near panic mode, the uptrend in EUR/AUD is one to watch with a light calendar ahead!
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/USD ahead of the ECB’s monetary policy statement, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
- ECB ramps up stimulus in virus fight but stops short of rate cut
- Stocks plunge into bear market as Trump’s Europe travel ban adds to economic headwinds
- U.S. weekly jobless claims fall
- U.S. producer prices post biggest drop in five years
- Carney sees big challenges as BoE eyes ‘digital banknotes’
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- Japan Tertiary industry index at 4:30 am GMT (Mar. 13)
What to Watch: EUR/AUD
Not much of anything on the economic calendar to likely spark a fresh volatility catalyst, so we’re checking out the driving themes of the day for today’s watchlist pair: EUR/AUD.
First, the euro is on the move higher after the European Central Bank held off from cutting interest rates, unlike recent moves from their counterparts, disappointing euro bears in the process. While they did announce measures to expanded its asset purchase program and support bank lending, traders were looking for a rate cut of 10 basis points, prompting a rally in the euro when it didn’t happen. And as far as the Aussie, the comdoll is taking a big hit lower with other risk assets on the session as traders go full risk-off mode after a U.S. President Trump failed to instill confidence with his address to the nation yesterday on the U.S.’ coronavirus response.
With those themes likely to stay in play for the rest of the session, the trend higher in EUR/AUD looks like one to watch. Traders are likely to stay on this train ride higher as long as no new surprises come around, and with volatility high in the pair (daily ATR of around 245 pips), there could still be pips to catch before the end of the session.
For the conservative bulls on this pair out there, waiting for a pullback to the minor broken resistance level around 1.7550 would be the higher probability of success setup and likely better return-on-risk. But for the more aggressive traders looking to go long, a retest of 1.7600 could be the level to start considering a buy if the bulls can hold it. The potential return-on-risk isn’t as good, but you lose the possibility of missing out on this trade if the pullback remains shallow.