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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:

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

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

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.