Quite a few top tier catalysts and technical setups to choose from, and we’re going with the strong trend lower in EUR/AUD ahead of Aussie and Chinese data.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on NZD/USD on strong risk-on sentiment, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
|DAX: 10813.66 +1.44%
FTSE: 5958.62 +1.91%
S&P 500: 2880.28 +1.80%
DJIA: 24191.88 +0.24%
|US 10-yr 0.622% -0.032
Bund 10-YR -0.469% -0.024
UK 10-YR: 0.286% -0.015
JPN 10-YR: -0.046 -0.022
|Oil: 13.26 +3.76%
Gold: 1713.8 -0.58%
Bitcoin: 7750.77 -0.19%
Etherium: 196.44 +0.08%
Fresh Market Headlines & Economic Data:
- Dow surges 400 points as positive Gilead news lifts hope for coronavirus treatment
- Oil jumps more than 20% on hope economy will reopen sooner than expected
- US GDP shrank 4.8% in the first quarter amid biggest contraction since the financial crisis
- U.S. Pending home sales tank nearly 21% in March
- German Import prices in March 2020: -5.5% on March 2019
- Annual growth rate of adjusted loans to euro area households decreased to 3.4% in March from 3.7% in February
- Swiss extend ban on events exceeding 1,000 people through August
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- FOMC Statement at 6:00 pm GMT
- FOMC Press Conference at 6:30 pm GMT
- Japan Industrial production & Retail sales at 11:50 pm GMT
- China Manufacturing & Services PMI at 1:00 am GMT (Apr. 30)
- Australia Trade Prices & Private Sector credit at 1:30 am GMT (Apr. 30)
- Japan Consumer confidence & Housing starts at 5:00 am GMT (Apr. 30)
What to Watch: EUR/AUD
It’s another round of positive global risk sentiment on the session as market players continue to focus on economies reopening and COVID-19 therapy/vaccine developments. Today, the positive results from Gilead’s remdesivir treatment had traders in an especially positive mood in the morning U.S. session.
This makes the strong short-term trend lower one to watch, and with the FOMC, Australia trade data, and Chinese business sentiment data ahead, it’s a trend that has further legs if the fundies post positive updates (i.e., surprise positive updates and an outlook of stimulative support to remain from the Fed).
For now, the bears have the advantage on this pair and if the above-described scenario plays out, the trend lower could continue in EUR/AUD. It’s potentially enough to reach the next major support level around 1.6500 based on the daily ATR of around 260 pips, and given that the pair is down 170 pips from the session open.
For the bears, negative updates from Australia/China and/or the Federal Reserve announce a pullback in stimulative measures (a highly unlikely scenario at the moment) may spark a round of risk-off sentiment that could hurt the Aussie in the short-term. In that scenario, watch out for a break of the falling ‘highs’ pattern before considering building a long position in EUR/AUD.