Daily Asia-London Sessions Watchlist: EUR/AUD

EUR/AUD has been in consolidation mode recently, but with a few mid-tier updates from both Australia and Europe be enough to spark a breakout?

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at an opportunity forming on NZD/USD as the Greenback rally continues, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Fresh Market Headlines & Economic Data:

Stocks dip as yields hold near one-year high

Oil settles lower, shrugs off Saudi attack after climbing above $70/bbl

Yellen says stimulus unlikely to cause inflation problem

U.S. consumers expect to spend more on rent and other bills, NY Fed survey finds

U.S. wholesale stocks rise; inventories-to-sales ratio lowest in six years

Fed extends small business liquidity facility three months to June 30

Sentix Investor confidence rises to 5.0 in March vs. -0.2 in February

ECB fails to raise emergency bond buys, blames redemptions

Andrew Bailey said that his overall assessment of Britain’s economic outlook was “positive but with large doses of cautionary realism.

UK draws up plan to postpone Brexit border checks on food

SNB Breathes Easy as Franc Drop Rebuts Critics on Two Fronts

Upcoming Potential Catalysts on the Economic Calendar

Japan Household Spending, Average Cash Earnings at 11:30 pm GMT
Japan GDP at 11:50 pm GMT
New Zealand Business Confidence at 12:00 am GMT (Mar. 9)
Australia Business Confidence at 12:30 am GMT (Mar. 9)
Australia New Home Sales at 4:00 am GMT (Mar. 9)
Japan Machine Tool Orders at 6:00 am GMT (Mar. 9)
German Trade Balance at 7:00 am GMT (Mar. 9)
Euro area Employment Change, Revised GDP at 10:00 am GMT (Mar. 9)

What to Watch: EUR/AUD

On the one hour chart above of EUR/AUD, we’ve got a symmetrical triangle forming, showing the current indecisiveness among traders on the pair. This pattern can often be used as a framework to jump into a strong directional move, which we may get with potential catalysts ahead from both Australia and Europe.

On the forex calendar, we’ve got mid-tier economic events to potentially shake up the pair, and what we’re looking for is a potential fundamental catalyst to pair with a downside breakout. The longer-term trend on EUR/AUD is to the downside, which makes a downside break the higher probability trade at the moment.

If we get a better-than-expected read on Australian Business confidence mixed with weaker-than-expected reads on German trade and Euro area GDP / employment, that may be enough to bring traders back to the longer-term downtrend.

And if the market breaks below the rising ‘lows’ pattern marked on the chart above, that could draw in technical sellers to keep the momentum going. If that scenario and price action sets up, we’ll look at putting together a short position from there, targeting the next potential support area around the previous consolidation around 1.5300 – 1.5350.

This setup also makes sense if global risk sentiment leans positive, which is not the case at the moment as global bond yields continue to rise, dampening the attractive of some risk assets.

This post first appeared on babypips.com