This pair has formed higher lows and higher highs inside a rising channel and is currently testing support.
Can EUR/AUD sustain its rally?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at EUR/JPY getting ready to test its range support. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- New Zealand Business NZ manufacturing index up from 54.2 to 63.6
- U.S. dollar takes hits as Treasury yields retreat
- Chinese economy grew 18.3% q/y as expected in Q1 2021
- China’s fixed asset investment up 25.6% ytd/y vs. 27% consensus
- Chinese industrial production rose by 14.1% vs. 18.3% expected
- Chinese retail sales up 34.2% vs. 28.0% consensus
Upcoming Potential Catalysts on the Economic Calendar:
- Canadian housing starts and wholesale sales at 1:30 pm GMT
- U.S. preliminary UoM consumer sentiment index at 3:00 pm GMT
What to Watch: EUR/AUD
Earlier today, China printed mixed results for its latest round of economic figures. While the GDP came in line with forecasts, industrial production missed the mark while retail sales beat expectations.
This could discourage Aussie bulls from charging, especially since risk appetite has been taking hits recently.In that case, EUR/AUD might soon make its way back up to the upside targets at the middle of the rising channel or the very top.
Are buyers ready to return right here?
Stochastic seems to be reflecting a return in bullish momentum, as the oscillator is pulling up from the oversold region.
While the 100 SMA is above the 200 SMA for now, the gap between the indicators is narrowing to reflect weakening upside pressure and a potential crossover.
Just be mindful of potential downside for the shared currency, though, as traders are wary of setbacks in the region’s vaccination rollout efforts and an uptick in confirmed cases in some nations.
A break below the channel support at the 1.3450 minor psychological mark could set off a reversal for EUR/AUD.