With risk taking back on and ahead of potential catalysts from Australia and China, the bounce off of resistance on EUR/AUD is one to watch for moves on the session.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/GBP ahead of U.K. unemployment data, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 13902.14 +1.89%
FTSE: 6662.84 +0.36%
S&P 500: 3858.57 +0.08%
NASDAQ: 13664.01 +0.21%
US 10-YR: 1.043% +0.003
Bund 10-YR: -0.535% +0.015
UK 10-YR: 0.268% +0.005
JPN 10-YR: 0.034% +0.00
Oil: 52.71 -0.11%
Gold: 1,853.80 -0.07%
Bitcoin: 31,800.00 -2.24%
Ethereum: 1,289.75 -4.55%
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
API Crude Oil stock change at 9:30 pm GMT
Australia Business Confidence, Inflation Rate at 12:30 am GMT (Jan. 27)
China Industrial Profits at 1:30 am GMT (Jan. 27)
What to Watch: EUR/AUD
On the one-hour chart above of EUR/AUD, we can see traders have respected the strong resistance area around 1.5750 – 1.5800, now taking the pair lower on a quick rising Aussie move. It looks like a move based on broad risk sentiment, which is leaning positive on the session with no apparent direct catalysts.
This move is likely to draw in more sellers on EUR/AUD short-term, and if the upcoming Australian inflation data comes in above expectations (Markets expect quarterly prices to dip to a 0.8% increase, with annualized prices inching up by 0.8%), it’s likely to fuel the Aussie’s rally even further through the Asia session.
For conservative bears on the pair, it makes sense to wait for a bounce up to the strong resistance area before considering a short position, and for the more aggressive bears, scaling into a short position makes sense to improve odds of success and potential return-on-risk.
For bulls on EUR/AUD, the odds aren’t currently in your favor, and won’t be until broad risk sentiment shifts back to negative and/or that upcoming Australian quarterly CPI number severely disappoints.
If that scenario plays out and EUR/AUD is retesting support around 1.5600 at that time, then watch out for bullish reversal patterns before considering a long, counter trend position on the pair.