The Euro is trading lower against the Australian dollar, as the latter one was bid earlier during the Asian session. I think the EUR/AUD pair should continue trading lower in the near term. However, there is a chance of a small correction from the current levels, which can be seen as a sell opportunity in the short term.
There was a bearish trend line formed on the 4 hour chart for the EUR/AUD pair. There is a critical resistance around the 1.4450-60 levels, which is closer to the trend line. Now, if the pair trades a bit higher from the current levels and closer to the mentioned resistance area, makes a stop, then we can jump into sell trade. Remember, the pair must continue to trade below the trend line for this setup to be valid, and risk should be small for this trade as we have news later during the upcoming Asian session.
Initial target should be around the 1.4310 level, and final target could be around the 1.4240 level. Stop should be above the 1.4485 level.
Reviewing yesterday’s events and trades
Yesterday, the Forex market was mostly calm, as there was no major event risk scheduled. The pairs such as EUR/USD, GBP/USD and USD/JPY mostly consolidated in a range. The only mover was the NZD/USD pair, which registered a minor decline Intraday. The pair traded as low as 0.8670 yesterday. Moreover, the USD/JPY pair was seen trading higher towards the 101.50 resistance level.
Fundamental Outlook for the day
Today, the US consumer price index data, existing home sales data and Richmond Manufacturing Index will be released. All these economic releases are important and might play a critical role in defining the short-term direction of the US dollar. So, we need to keep a close eye on all these events. Moreover, during the next Asian session, the Australian CPI data will be released, which might cause a lot of volatility in the Australian dollar. So, we can expect a lot of moves in the upcoming sessions.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EUR/USD, GBP/USD, GBP/JPY, AUD/USD, EUR/JPY and NZD/USD.