The U.S. session is light on data releases today so I’m looking to the ECB’s event and overall risk sentiment for EUR/AUD’s price direction.
Before moving on, ICYMI, today’s Asia-London session watchlist looked at a major area of interest on EUR/JPY ahead of the ECB’s event. Be sure to check that out if it’s still a valid play!
If you’re unfamiliar with forex trading sessions, learn about them with our Forex Market Hours tool.
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Japan’s markets on bank holiday
- NAB quarterly business survey: business conditions jump, confidence eased slightly in Q2 2021
- Bitcoin climbs as Elon Musk says Tesla ‘likely’ to accept it again
- BoE’s Broadbent sees little sign of inflation spike persisting
- Dollar, yen on back foot as risk sentiment revives; Musk buoys bitcoin
- Stocks back near record highs on dovish ECB bets
Upcoming Potential Catalysts on the Economic Calendar:
- U.K.’s CBI industrial order expectations at 10:00 am GMT
- ECB’s monetary policy decision at 11:45 am GMT
- ECB’s presser at 12:30 pm GMT
- U.S. initial jobless claims at 12:30 pm GMT
- Eurozone consumer confidence at 2:00 pm GMT
- U.S. existing home sales at 2:00 pm GMT
What to Watch: EUR/AUD
In a few hours, the European Central Bank (ECB) will publish its monetary policy decision for July.
Word around is that ECB President Lagarde and her team will keep the tab open for the foreseeable future especially as parts of the Eurozone experienced flooding while the Delta COVID-19 variant limited the momentum of economic recovery.But it won’t all be gloom and doom for the ECB. For one thing, increased vaccinations and easing restrictions are expected to contribute to economic activity.
On the other side of the trade, the Australian economy continues to wrestle with rising COVID-19 cases and the possibility of more lockdowns in key cities.
This is why, unless the ECB turns out to be more dovish than expected, then we’ll likely see at least some EUR/AUD buying.
Talks of extended stimulus could bring bears to the euro’s yard but I’ll be looking at the 1.5925 zone near the 200 SMA and channel support for some signs of buying.
If the ECB gang step up their dovish game, though, then EUR/AUD may finally break below its trend line support and revisit last week’s lows.