Forex trader eagerly await a fresh batch of PMI data out of the Eurozone. Economists expect a minor improvement for December, amid solid demand from the holiday shopping season. The EURAUD advanced this morning into the lower band of its horizontal resistance area, but how will price action react after the release of PMI data? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
Australian PMI data showed that the contraction accelerated in December, but Chinese data came in promising. Industrial production data and retail sales point towards a strong December and offer signs of an economic recovery. Should Eurozone PMI data follow Australian data, the EURAUD is favored to enter a sell-off. Will bears get the data they need or can bulls push for more upside? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for Euro trades:
- French Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary French Markit Manufacturing PMI for December is predicted at 51.5. Forex traders can compare this to the French Markit Manufacturing PMI for October, which was reported at 51.7. The Preliminary French Markit Services PMI for December is predicted at 52.1. Forex traders can compare this to the French Markit Services PMI for October, which was reported at 52.2. The Preliminary French Markit Composite PMI for December was reported at 52.0. Forex traders can compare this to the French Markit Composite PMI for October, which was reported at 52.1.
- German Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary German Markit Manufacturing PMI for December is predicted at 44.6. Forex traders can compare this to the German Markit Manufacturing PMI for October, which was reported at 44.1. The Preliminary German Markit Services PMI for December is predicted at 52.0. Forex traders can compare this to the German Markit Services PMI for October, which was reported at 51.7. The Preliminary German Markit Composite PMI for December is predicted at 49.9. Forex traders can compare this to the German Markit Composite PMI for October, which was reported at 49.4.
- Italian CPI: The Preliminary Italian CPI for December is predicted flat at 0.0% monthly and to increase by 0.4% annualized. Forex traders can compare this to the Italian CPI for November, which decreased by 0.1% monthly, and which increased by 0.4% annualized. The Preliminary Italian Harmonized CPI for December is predicted to decrease by 0.1% monthly and to increase by 0.4% annualized. Forex traders can compare this to the Italian Harmonized CPI for November, which decreased by 0.1% monthly and which increased by 0.4% annualized.
- Eurozone Manufacturing PMI, Services PMI, and Composite PMI: The Preliminary Eurozone Markit Manufacturing PMI for December is predicted at 47.3. Forex traders can compare this to the Eurozone Markit Manufacturing PMI for October, which was reported at 46.9. The Preliminary Eurozone Markit Services PMI for December is predicted at 52.0. Forex traders can compare this to the Eurozone Markit Services PMI for October, which was reported at 51.9. The Preliminary Eurozone Markit Composite PMI for December is predicted at 50.7. Forex traders can compare this to the Eurozone Markit Composite PMI for October, which was reported at 50.6.
Here is the key factor to keep in mind today for Australian Dollar trades:
- Australian CBA Manufacturing PMI, CBA Services PMI, and CBA Composite PMI: The Preliminary Australian Manufacturing PMI for December was reported at 49.4. Forex traders can compare this to the Australian CBA Manufacturing PMI for November, which was reported at 49.9.The Preliminary Australian CBA Services PMI for December was reported at 49.5. Forex traders can compare this to the Australian CBA Services PMI for November, which was reported at 49.7. The Preliminary Australian CBA Composite PMI for December was reported at 49.4. Forex traders can compare this to the Australian CBA Composite PMI for November, which was reported at 49.7.
- Chinese New Home Prices: Chinese New Home Prices for November increased by 0.3% monthly. Forex traders can compare this to Chinese New Home Prices for October, which increased by 0.5% monthly.
- Chinese Fixed Assets ex Rural: Chinese Fixed Assets ex Rural for November increased by 5.2% annualized. Economists predicted an increase of 5.2% annualized. Forex traders can compare this to Chinese Fixed Assets ex Rural for October, which increased by 5.2% annualized.
- Chinese Industrial Production: Chinese Industrial Production for November increased by 6.2% annualized. Economists predicted an increase of 5.0% annualized. Forex traders can compare this to Chinese Industrial Production for October, which increased by 4.7% annualized.
- Chinese Retail Sales: Chinese Retail Sales for November increased by 8.0% annualized. Economists predicted an increase of 7.6% annualized. Forex traders can compare this to Chinese Retail Sales for October, which increased by 7.2% annualized.
- Chinese Property Investment: Chinese Property Investment for November increased by 10.2% annualized. Forex traders can compare this to Chinese Property Investment for October, which increased by 10.3% annualized.
- Chinese Surveyed Jobless Rate: The Chinese Surveyed Jobless Rate for November was reported at 5.1%. Forex traders can compare this to the Chinese Surveyed Jobless Rate for October, which was reported at 5.1%.
Should price action for the EURAUD remain inside the or breakdown below the 1.6170 to 1.6235 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6200
- Take Profit Zone: 1.5800 – 1.5900
- Stop Loss Level: 1.6270
Should price action for the EURAUD breakout above 1.6235 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6270
- Take Profit Zone: 1.6430 – 1.6500
- Stop Loss Level: 1.6235
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