Trading Outlook – EUR/AUD

Posted On 05 Mar 2015

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Originally updated: 7:30

Trading Bias: SHORT

Currency pair: EUR/AUD

Current Sentiment: Bearish

In today’s trading session we will be focussing on selling opportunities on the EUR/AUD.

Fundamentals:

Overnight Australian (retail sales, trade balance) both came out relatively in line with expectations and as such didn’t spur a market reaction, later in the session however we had comments from RBA’s deputy Gov Lowe. Lowe was less dovish than expected and stated the RBA was not using policy to push the AUD lower, this in conjunction with their decision to keep rates on hold earlier in the week supported the AUD.

Leading into the ECB rate statement today we can only expect the EUR to be under selling pressure, we don’t expect the ECB to say anything new as they will be wanting to gauge the effects of QE prior to any further market moving rhetoric.

We can look for opportunities to short the pair leading into the event should the EUR rally, the wild card to watch out for on this trade is SNB intervention – the EUR was under selling pressure throughout yesterday’s session this is a concern of the SNB’s and we have witnessed a pattern of intermittent intervention on the EUR/CHF. Watch out for EUR/CHF and USD/CHF rallies to gauge whether the SNB are at play in the markets trying to devalue their currency, should that occur the EUR will strengthen across the board.

Technicals:

We expect this pair to sell off during today’s session.

There is strong resistance at 1.4250 which could provide trading opportunities should the price pull back. Look for the price to bounce off this level if it retraces back to it.

Remember to be aware of intra-day news as this can very often change the sentiment which makes our trade weaker. Look for any news that could be positive for this pair, which would change the sentiment to bullish.

Other Market Moving News:

Also on today’s calendar we have UK rate decision and MPC Rate Statement, weekly US unemployment claims and Canadian Ivey PMI later in the session.

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