EUR/AUD is finding resistance at a potential inflection point!
Let’s see if today’s catalysts can help extend EUR/AUD’s short-term downtrend:
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/USD’s uptrend ahead of China’s data dump. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Retail Sales for September: 0.7% m/m (0.3% m/m forecast; 0.8% m/m previous); core retail sales at 0.6% m/m (0.2% m/m forecast; 0.9% m/m previous)
Canada CPI for September: -0.1% m/m (0.5% m/m forecast; 0.4% m/m previous); core CPI was -0.1% m/m (0.3% m/m forecast; 0.1% m/m previous)
U.S. Industrial Production: 0.3% m/m (0.2% m/m forecast / 0.0% m/m previous)
NAHB Housing Market Index for October: 40 (47.0 forecast; 44.0 previous)
Canada foreign securities purchases for August 2023: $14.9B; foreign purchases of Canadian securities fell by -$8.5B
RBA Gov. Michele Bullock says higher rates are “starting to bite” and cited services inflation and housing prices as higher inflation risks
China’s industrial production maintained its 4.5% y/y uptick in September (vs. 4.4% expected)
China’s Q3 GDP slowed down from 6.3% to 4.9% but beat 4.5% growth estimates
China’s retail sales sped up from 4.6% to 5.5% y/y in September
China’s fixed asset investment grew by 3.1% in the first nine months of the year compared to a year ago (vs. 3.2% expected and previous)
China’s unemployment rate eased from 5.2% to 5.0% in September
U.K.’s headline CPI remains at 6.7% y/y in September (vs. 6.6% expected); core CPI eased from 6.2% to 6.1% y/y (vs. 6.0% expected)
Price Action News
The Australian dollar extended an upswing that started this week!
This time, a better-than-expected Chinese GDP report gave the comdoll a boost and the upswing didn’t let up until the start of London session trading.
It may have also helped AUD buyers that commodities like gold and oil traded higher after Biden’s summit with Middle East leaders got canceled and a blast in a hospital in Gaza killed hundreds and escalated the Israel-Hamas conflict.
It’s a pretty close call but AUD has gained the most against USD, JPY, and NZD and has gained the least against GBP and CHF.
Upcoming Potential Catalysts on the Economic Calendar:
Eurozone’s final CPI numbers at 9:00 am GMT
Canada’s housing starts at 12:15 pm GMT
U.S. building permits at 12:30 pm GMT
Australia’s CB leading index at 2:30 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
U.S. Beige Book report at 6:00 pm GMT
Japan’s trade balance at 11:50 pm GMT
Australia’s labor market data at 12:30 am GMT (Oct 19)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
China’s stronger-than-expected data dump earlier today propelled AUD higher against its major counterparts including EUR.
EUR/AUD, in particular, got rejected from the 1.6620 Pivot Point and channel resistance area before the pair found support at the 1.6550 levels.
Can EUR/AUD extend its intraweek downtrend?
The pair is having trouble making new highs above 1.6580, which lines up with yesterday’s lows and today’s mid-channel resistance area.
EUR/AUD bears can take advantage of Stochastic‘s overbought signal and short at current levels.
If you’re more conservative and you think that EUR can still gain a pip or two during the European session, then you can also eye the 1.6600 – 1..6620 resistance zone for entry opportunities.
In any case, make sure your stop losses account for Australia’s labor data scheduled in the next Asian session trading.
Word around is that we could see weaker labor market numbers in September, but it probably won’t take much to remind traders that the RBA is one of the more hawkish central banks out there.
Good luck and good trading this one!