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Market View

A potential Setup for EURAUD

Tuesday, June 4, 2019 5:24 PM GMT

As we have passed today’s monetary meeting of the Central Bank of Australia (RBA), when markets rewarded RBA for being quick to cut rates, and as we are heading towards Thursday’s monetary meeting of the ECB, a potentially rewarding bearish scenario could materialize for EURAUD if the pair tests the 0.50 or 0.618 Fibonacci level.

EURAUD 1Hour Chart

The bearish scenario should be considered busted if the pair reaches the 1.6177 level.

 

Strengths of EURAUD:

  • Improving macro readings of European Economy: GDP, inflation, unemployment, M3, private loans, German GDP, German Trade balance, German factory orders, wage growth, consumer confidence, industrial production, business climate, investor confidence
  • Deteriorating macro readings of Australian Economy: GDP, inflation gauge, retail sales, unemployment, job advertisements, inflation expectations, retail sales, trade balance, home loans, private sector credit, home sales, building approvals, AIG construction index, company operating profits, decreasing capital expenditure, private capital expenditure, business confidence 

Weakness of EURAUD:

  • Newly elected government in Australia.
  • Italy could potentially hit the headlines with EU deciding to start the process that would result into a €3.5bn fine for failing to comply with fiscal rules
  • Improving macro readings of Australian economy: current account, M1, service PMI, Manufacturing PMI, AIG manufacturing index, construction work done (but is still in a negative territory), household consumption, consumer's sentiment, wage price index
  • Deteriorating macro readings of European economy: inflation, retail sales, current account, trade balance, PPI, German industrial production, German Manufacturing PMI (way below 50 and falling), German retail sales, German consumer climate, European industrial production, EU Manufacturing PMI, service PMI, economic sentiment, German economic sentiment

 

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change.Reliance upon information in this material is at the sole discretion of the reader. Opinions expressed in the report do not represent the opinion of Zulutrade and do not constitute an offer or invitation to anyone to invest or trade.

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