The Euro was seen trading lower against the US dollar, but it managed to gain some bids against the Australian dollar. The EURAUD pair was seen trading higher after making four consecutive lows on the 4 hour chart. I think the pair might continue trading higher, and we should be looking for buying opportunities in the short term.
The EURAUD pair has breached an important resistance around the 1.4070 level, which might act as a support moving ahead. If the pair moves a bit lower from the current levels, makes a stop and forms a bullish divergence, then we can jump into a buy trade. Remember, the mentioned support area must hold for this setup to be valid.
Initial target should be around the 1.4180 level, and final target could be around the 1.4210 level. Stop should be below the 1.4060 level.
Reviewing yesterday’s events and trades
Yesterday, it was a holiday in the US, but there was some action during the London session. There were a few important economic releases scheduled in the Euro zone and the UK. The important ones were the German GDP, Euro zone manufacturing PMI and the UK manufacturing PMI. The outcome was mostly discouraging, and as a result the Euro and the British pound were seen trading lower after the release. Moreover, the RBA interest rate decision was lined up during the late Asian session. The result was as expected with the central bank keeping the rates at 2.5%.
Fundamental Outlook for the day
Today, the US ISM manufacturing PMI and the Investor’s Business Daily (IBD), TechnoMetrica Institute of Policy and Politics (TIPP) Economic Optimism Index will be released during the NY session. The US ISM manufacturing PMI is expected to decline by 0.3 points. If the outcome stays below the expectation, then the US dollar might correct lower in the short term. Moreover, the Australia’s GDP data will be published during the next Asian session. This particular release might impact the Australian dollar to a greater extent.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
