EUR/AUD just got rejected at a short-term resistance zone!
Will today’s events keep the pair inside its identifiable consolidation?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/CHF’s potential trend retracement ahead of lower-tier report releases from the U.S. 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:
FOMC member Neel Kashkari shared that there’s a 40% chance the Fed would “push the federal funds rate higher, potentially meaningfully higher”
API: U.S. crude oil stocks up by 1.586M barrels in the week ending Sept 22 after a 5.25M-barrel drop in the previous week
Higher fuel prices boosted Australia’s CPI from 4.9% y/y to 5.2% y/y in August as expected, adding to rate hike speculations for next month
China’s industrial profits fell by 11.7% ytd/y in August, a bit better than the 15.5% ytd/y decline in July, as government support measures helped stabilize parts of the economy
BOJ’s meeting minutes showed the members’ deviating views on when they should exit their easy monetary policies
In a presser, Japan’s Finance Minister Suzuki said that he’s “watching market trends with a high sense of urgency”
Credit Suisse: Swiss investors’ sentiment improved from -38.6 to -27.6 in September, the highest in seven months
INSEE: France’s consumer confidence remained at a four-month low of 83 in September
Germany’s GfK consumer sentiment deteriorated from -25.6 to 26.5 in September; “Private consumption will not be able to positively contribute to overall economic development this year.”
The gap between Italian and German 10-year yields – a gauge of market sentiment towards the euro area’s most indebted countries hits the highest since May ahead of Italy’s budget talks
Price Action News
A higher-than-expected August CPI reading from Australia boosted the Australian dollar earlier today. It also didn’t hurt that the PBOC set a yuan-supportive benchmark setting for its USD/CNY rates and that China’s central bank promised to provide “more powerful” policy support for the real economy and maintain a “healthy” property market.
Risk aversion soon took over the markets, however. Concerns over China’s shaky property sector limited risk-taking during the Asian session while early European traders were spooked by weaker French and German consumer surveys.
AUD peaked during Australia’s CPI release but also made new intraday lows against all of its major counterparts.
Upcoming Potential Catalysts on the Forex Economic Calendar:
FOMC member Neel Kashkari to give a CNBC interview at 12:00 pm GMT
U.S. core durable goods orders at 12:30 pm GMT
SNB’s quarterly bulletin at 1:00 pm GMT
SNB Chairman Thomas Jordan to participate in a panel discussion at 4:45 pm GMT
NZ ANZ business confidence at 12:00 am GMT (Sept 28)
Australia’s retail sales at 1:30 am GMT (Sept 28)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
EUR/AUD: 15-min
The euro started today’s London session on a weak footing thanks to weaker-than-expected consumer surveys from both France and Germany.
EUR/AUD, which started turning higher during yesterday’s U.S. session trading, hit an intraday high near 1.6580 before turning lower.
The pair is currently trading at the 1.6550 minor psychological handle that’s also a bit closer to yesterday’s highs.
How low will EUR/AUD go before the buyers step in again?
Aussie traders who have yet to price in Australia’s strong inflation report can take advantage of EUR’s weakness and drag EUR/AUD to lower areas of interest like the 1.6525 mid-range levels or the 1.6510 Pivot Point line.
But Stochastic is already flashing its “oversold” signal and EUR/AUD may also find support from its current prices.
If risk aversion accelerates in the next trading sessions, then EUR may cash in on its “European safe haven” rep and gain pips against the “risky” AUD.
Risk aversion or a weak Australian retail sales release may push EUR/AUD back to its 1.6580 highs if not the 1.6600 psychological level and R1 Pivot Point line.
