Checking out EUR/AUD for today’s watchlist, looking to play the current trend lower with potential catalysts ahead coming in the form of top tier economic updates from China.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on USD/CAD as crude oil takes a hit, so be sure to check that out to see if there is still a potential play!
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 10277.23 -0.02% FTSE: 5613.66 +0.29% S&P 500: 2784.19 +0.03% DJIA: 23372.70 -0.56% |
US 10-yr 0.602% -0.039 Bund 10-YR -0.483% -0.019 UK 10-YR: 0.296% -0.006 JPN 10-YR: -0.004% -0.018 |
Oil: 20.05 +0.91% Gold: 1757.20 +0.97% Bitcoin: 7014.71 +5.84% Etherium: 170.61 +11.20% |
Fresh Market Headlines & Economic Data:
- U.S. Weekly jobless claims hit 5.245 million, raising monthly loss to 22 million due to coronavirus
- Privately-owned housing starts declined last month to an annualized rate of 1.2M, a 22% decline from the pace in Feb.
- Philly Fed manufacturing index plunges in April to -56.6, worse than the Great Recession
- Canadian manufacturing sales edge up 0.5% in February despite rail blockades, COVID-19
- Canada sheds 177,300 jobs in March as coronavirus rips through economy
- Oil prices rise after sharp losses caused by U.S. stockpile surge
- Industrial production down by 0.1% in euro area; Unchanged in EU
- German Wholesale prices in March 2020: -1.5% on March 2019
- German Inflation rate at +1.4% in March 2020
- ECB ready to do more to avoid euro ‘fragmentation’: Schnabel
- Bank of England Credit conditions survey for Q1 2020: Taken mostly before the rapid escalation of the coronavirus pandemic, we saw demand rise for credit
- BoE’s Tenreyro sees ‘extremely large’ hit from COVID-19
- Swiss Producer and Import Price Index fell by 0.3% in March 2020
- Switzerland to start easing COVID-19 restrictions from April 27
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- BOC Governor Poloz speech at 8:00 pm GMT
- China Retail sales, GDP, Industrial production, unemployment rate at 2:00 am GMT (Apr. 17)
- Japan Industrial production & Tertiary Industry index at 4:30 am GMT (Apr. 17)
What to Watch: EUR/AUD
The Australian dollar has been on a tear against the majors this month, and that doesn’t look to slow down at the moment, but we’ve got top tier economic updates that may influence global risk sentiment and Aussie price action.
As we can see in the “Upcoming Potential Catalysts” section, China will be releasing updates on Retail sales, GDP, Industrial production, and expectations are that the monthly reads like the unemployment rate will show a little bit of bounce, while the quarterly reads like GDP will of course be incredibly terrible.
So, we’re watching those numbers, and if they do come out net better-than-expected, watch EUR/AUD for a potential short position to go with the trend on the one hour chart above. The pair has been moving lower since mid-March, and seems to be turning back to the downside after a quick bounce and finding resistance around 1.7350.
With a daily ATR of around 300 pips, a stop just above the last resistance area and targeting the major psychological level of 1.7000 and the swing lows around 1.6850 makes for a solid short-term potential return-on-risk.
For EUR/AUD bulls out there, a round of disappointing Chinese data showing now signs of a rebound may bring in both negative global risk sentiment and negative Aussie sentiment, at which point the signal to watch out for is a break above 1.7350, and maybe even a break/retest/hold pattern at that level.
If so, again using the daily ATR as a stop guide and going for the next swing resistance area (around 1.7700) makes for a solid short-term potential return-on-risk that’s potentially reachable in a session or two.
