Forex traders will start the new trading week with a series of economic reports out of Eurozone member countries. After German retail sales came in stronger then expected, and Spanish data showed the absence of inflationary pressures as the economy expanded 2.0% annualized in the second-quarter, the EURAUD remained above support as bulls refused to give in to bears. More inflation data will be reported during the trading session, on top of unemployment data. How will this impact price action in the this currency pair? Today’s fundamental analysis will take a look in both directions.
Data released this morning out of Australia showed tame inflation and lower than expected private sector credit data. The main focus was on Chinese PMI data with an upward surprise in the manufacturing sector. This lifted the mood in financial markets and boosted the Australian Dollar. Is this just a short-term positive development out of China or is more to come? How will this impact the EURAUD moving forward? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per months in profits!
Here are the key factors to keep in mind today for Euro trades:
- German Retail Sales: German Retail Sales for August increased by 0.5% monthly and by 3.2% annualized. Economists predicted an increase of 0.5% monthly and of 3.3% annualized. Forex traders can compare this to German Retail Sales for July which decreased by 0.8% monthly and which increased by 5.2% annualized.
- Spanish GDP: The Preliminary Spanish GDP for the second-quarter increased by 0.4% quarterly and by 2.0% annualized. Economists predicted an increase of 0.5% and of 2.3%. Forex traders can compare this to the Spanish GDP for the first-quarter which increased by 0.5% quarterly and by 2.4% annualized.
- Preliminary Spanish CPI: The Preliminary Spanish CPI for September was reported flat at 0.0% monthly and increased by 0.1% annualized. Economists predicted a decrease of 0.1% and an increase of 0.3%. Forex traders can compare this to the Spanish CPI for August which decreased by 0.1% monthly and which increased by 0.3% annualized. The Preliminary Spanish Harmonized Spanish CPI for September was reported flat at 0.0% monthly and increased by 0.2% annualized. Economists predicted an increase of 0.1% and of 0.3%. Forex traders can compare this to the Spanish Harmonized Spanish CPI for August which decreased by 0.1% monthly and which increased by 0.4% annualized.
- German Unemployment Change and German Unemployment Rate: The German Unemployment Change for September is predicted at 5K and the German Unemployment Rate at 5.0%. Forex traders can compare this to the German Unemployment Change for August which was reported at 4K and to the German Unemployment Rate which was reported at 5.0%.
- Italian Unemployment Rate: The Italian Unemployment Rate for August is predicted at 9.9%. Forex traders can compare this to the Italian Unemployment Rate for July which was reported at 9.9%.
- Italian CPI: The Preliminary Italian CPI for September is predicted to decrease by 0.2% monthly and to increase by 0.6% annualized. Forex traders can compare this to the Italian CPI for August which increased by 0.4% monthly and by 0.4% annualized. The Preliminary Italian Harmonized CPI for September is predicted to increase by 1.8% monthly and by 0.6% annualized. Forex traders can compare this to the Italian Harmonized CPI for August which was reported flat at 0.0% monthly and which increased by 0.5% annualized.
- Eurozone Unemployment Rate: The Eurozone Unemployment Rate for August is predicted at 7.5%. Forex traders can compare this to the Eurozone Unemployment Rate for July which was reported at 7.5%.
- Italian CPI: The Preliminary Italian CPI for September is predicted to increase by 0.1% monthly and by 1.3% annualized. Forex traders can compare this to the Italian CPI for August which decreased by 0.2% monthly and which increased by 1.4% annualized. The Preliminary Italian Harmonized CPI for September is predicted to increase by 0.1% monthly and by 1.0% annualized. Forex traders can compare this to the Italian Harmonized CPI for August which decreased by 0.1% monthly and which increased by 1.0% annualized.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian TD Securities Inflation: Australian TD Securities Inflation for September increased by 0.1% monthly and by 1.5% annualized. Forex traders can compare this to Australian TD Securities Inflation for August which was reported flat at 0.0% monthly and which increased by 1.7% annualized.
- Chinese PMI: The Chinese Non-Manufacturing PMI for September was reported at 53.7 and the Chinese Manufacturing PMI at 49.8. Economists predicted a figure of 53.9 and of 49.6. Forex traders can compare this to the Chinese Non-Manufacturing PMI for August which was reported at 53.8 and to the Chinese Manufacturing PMI which was reported at 49.5. The Chinese Composite PMI for September was reported at 53.1. Forex traders can compare this to the Chinese Composite PMI for August which was reported at 53.0.
- Australian Private Sector Credit: Australian Private Sector Credit for August increased by 0.2% monthly and by 2.9% annualized. Economists predicted an increase of 0.3% monthly and of 3.0% annualized. Forex traders can compare this to Australian Private Sector Credit for July which increased by 0.2% monthly and by 3.1% annualized.
- Chinese Caixin Manufacturing PMI: The Chinese Caixin Manufacturing PMI for September was reported at 51.4. Economists predicted a figure of 50.2. Forex traders can compare this to the Chinese Caixin Manufacturing PMI for August which was reported at 50.4.
Should price action for the EURAUD remain inside the or breakout above the 1.6130 to 1.6220 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.6200
- Take Profit Zone: 1.6470 – 1.6525
- Stop Loss Level: 1.6075
Should price action for the EURAUD breakdown below 1.6130 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.6075
- Take Profit Zone: 1.5895 – 1.5945
- Stop Loss Level: 1.6130
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