Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian Westpac Consumer Confidence for April surged 9.4% monthly at 85.8. Forex traders can compare this to Australian Westpac Consumer Confidence for March, which was flat at 0.0% monthly at 78.5.
Australian NAB Business Conditions for March came in at 16, and Australian NAB Business Confidence at -1. Economists predicted a reading of 16 and -2. Forex traders can compare this to NAB Business Conditions for February, reported at 17, and Australian NAB Business Confidence at -4.
The Chinese PPI for March decreased by 2.5% annualized, and the Chinese CPI increased by 0.7% annualized. Economists predicted a contraction of 2.5% and an expansion of 1.0%. Forex traders can compare this to the Chinese PPI for February, which dropped by 1.4% annualized, and the Chinese CPI, which rose 1.0%.
Eurozone Sentix Investor Confidence for April is predicted at -9.9. Forex traders can compare this to Eurozone Sentix Investor Confidence for March, reported at -11.0.
Eurozone Retail Sales for February are predicted to decrease by 0.8% monthly and 3.5% annualized. Forex traders can compare this to Eurozone Retail Sales for January, which rose by 0.3% monthly and dropped by 2.3% annualized.
After the Reserve Bank of Australia opted to hold interest rates steady, the Australian Dollar lost has lost its upward catalyst. The next interest rate increase by the European Central Bank will result in higher rates than in Australia, which can drive a correction in the EUR/AUD. Economic uncertainty, recession fears, and inflation will dominate the headlines, but the Eurozone economy appears on moderately better footing than Australia. Traders should also pay closer attention to bond markets in both countries to spot early warnings of worsening credit conditions.
The forecast for the EUR/AUF turned bearish after this currency pair reached its horizontal resistance area, from where upside momentum began to fade. A pending breakdown could accelerate selling pressure, but volatility could increase as the Tenkan-sen has flatlined while the Kijun-sen continues to move higher. It confirms that bulls and bears will fight for directional control. Traders should also monitor the CCI after it recorded a lower high in extreme overbought territory, resulting in a negative divergence. A sustained breakdown below 100 could spark a sell-off, which can increase if this technical indicator moves below zero. Can bears overpower bulls and pressure the EUR/AUD into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/AUD remain inside the or breakdown below the 1.6275 to 1.6390 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6315
- Take Profit Zone: 1.5940 – 1.6035
- Stop Loss Level: 1.6435
Should price action for the EUR/AUD breakout above 1.6390, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6435
- Take Profit Zone: 1.6475 – 1.6525
- Stop Loss Level: 1.6390
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