The ECB is expected to keep interest rates and its bond-buying program unchanged. Divisions between the voting members a growing in the divided central bank, a development which should be followed closely. The EURAUD is in a holding pattern inside of its horizontal support area. Will today’s ECB press conference allow this currency pair to attempt a breakout, or will a breakdown follow? Today’s fundamental analysis will take a look at price action in both directions.
The Australian employment report for December came in better-than-expected, but this was due to a strong reading in part-time positions. The minor loss in full-time positions dampened optimism. Consumer inflation expectations surged, and if they remain elevated the RBA is unlikely to cut interest rates. Forex traders are now awaiting the ECB interest rates press conference, how will it impact this currency pair. 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:
- ECB Rate Decision: The ECB is predicted to keep its Interest Rate at 0.00%, its Deposit Facility Rate at -0.50% and its Marginal Lending Facility Rate at 0.25%; this would equal no change in the ECB rate policy from the previous meeting. The bond-buying program is predicted to remain unchanged at €20 billion per month.
- Eurozone Consumer Confidence: Eurozone Consumer Confidence for February is predicted at -7.8. Forex traders can compare this to Eurozone Consumer Confidence for January, which was reported at -8.1.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Consumer Inflation Expectations: Australian Consumer Inflation Expectations for January increased by 4.7% annualized. Forex traders can compare this to Australian Consumer Inflation Expectations for December, which increased by 4.0% annualized.
- Australian Employment Report: The Australian Employment Change for December was reported at 28.9K. Economists predicted a figure of 10.0K. Forex traders can compare this to the Australian Employment Change for November, which was reported at 38.5K. The Unemployment Rate for December was reported at 5.1%. Economists predicted a reading of 5.2%. Forex traders can compare this to the Unemployment Rate for November, which was reported at 5.2%. 0.3K Full-Time Positions were lost and 29.2K Part-Time Positions were created in December. Forex traders can compare this to the addition of 3.3K Full-Time Positions and 35.1K Part-Time Positions, which were reported in November. The Labor Force Participation Rate for December was reported at 66.0%. Economists predicted a reading of 66.0%. Forex traders can compare this to the Labor Force Participation Rate for November, which was reported at 66.0%.
Should price action for the EURAUD remain inside the or breakout above the 1.6120 to 1.6175 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6150
- Take Profit Zone: 1.6370 – 1.6430
- Stop Loss Level: 1.6080
Should price action for the EURAUD breakdown below 1.6120 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6080
- Take Profit Zone: 1.5895 – 1.5965
- Stop Loss Level: 1.6120
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