Word through the forex grapevine is that the ECB might be mulling a 0.50% hike this week.
Are euro bulls in for a disappointment, though?
Let’s see how EUR/AUD reacts to the top of its short-term range!
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/USD’s bullish reversal ahead of the RBA minutes. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
RBA meeting minutes: Inflation increased further to multi-decade highs
RBA: Resilience of Australian economy evident in labor market
Swiss trade surplus widened from 3.12B CHF to 3.80B CHF
UK claimant count dropped by 20K vs. projected 41.2K decline
UK unemployment rate held steady at 3.8% as expected
UK average earnings index slid from 6.8% to 6.2% vs. 6.7% forecast
ECB policymakers reportedly discussing a 0.50% hike this week
BOE Governor Bailey’s speech at 3:00 pm GMT
FOMC member Brainard’s speech at 6:35 pm GMT
RBA Governor Lowe’s speech at 11:10 pm GMT
New Zealand GDT dairy auction coming up
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/AUD
The euro is feelin’ the bullish vibe lately, as rumor has it that the ECB might be open to a 0.50% hike this week.
Can this wishful thinking last, though?
EUR/AUD may have popped sharply higher on the news, but it’s also worth noting that Australia’s fundamentals are looking hella strong.
In fact, the RBA minutes just acknowledged that the Australian economy has been resilient, even with international headwinds and strong inflationary pressures.
This might be enough to keep the short-term range resistance holding, possibly sending EUR/AUD back down to the bottom near the 1.4800 handle.
Technical indicators are looking mixed, though. The 100 SMA is below the 200 SMA to reflect bearish pressure, but Stochastic is just starting to make its way out of the oversold region. Also, the gap between the moving averages has narrowed enough to hint at a possible bullish crossover.
With that, a break above the nearby ceiling at 1.4925 could set off a rally that’s at least the same height as the range.
Better keep close tabs on headlines that might impact overall risk sentiment, too!