EURAUD is currently supported by a short-term trend line, with market focus shifting to the upcoming release of significant economic data from China. This raises the question: Will the currency pair continue its upward trajectory in future trading sessions?
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
1. New Zealand’s Q4 2023 NZIER QSBO index significantly improved, influenced by heightened demand, reduced labour shortages, and lessening inflationary pressures.
2. In Australia, consumer sentiment, as measured by Westpac, showed a decline, indicating the impact of increased living costs, higher interest rates, and taxes on Australian consumers.
3. Japan reported flat producer prices in December, aligning with expectations and contrasting with the previous month’s figures.
4. According to the Financial Times, Chinese authorities have reportedly advised certain institutional investors against selling stocks.
5. Germany’s inflation rate for December was confirmed, showing a decrease compared to the overall rate in 2023.
6. The UK labor market data suggests potential for BOE rate cuts, evidenced by increased jobless claims and a slowdown in wage growth, while unemployment rates remain stable.
Price Action News
Thanks to a lack of fresh top-tier catalysts in the Asian and early London session trading, the markets focused on the European Central Bank (ECB) members lowkey speaking against premature easing of their monetary policies.
The adjustment of the markets’ interest rate cut bets, combined with escalating tensions in the Middle East, inspired a risk-averse trading environment that boosted the safe-haven U.S. dollar against its major counterparts.
USD is trading in the green across the board, printing the most gains against AUD and NZD while printing the least pips against CAD, EUR, and CHF.
Upcoming Potential Catalysts on the Economic Calendar:
Canadian – CPI (3:00pm GMT & US Empire State Manufacturing) BOE Gov. Bailey to give a speech – 3:00 pm GMT
FOMC member Christopher Waller to give a speech – 4:00 pm GMT
China’s key data release at 2:00 am GMT (Jan 17)
EURAUD: DAILY CHART
As mentioned above, ECB members recently made efforts to shoot down speculations of interest rate cuts in the foreseeable future.
Meanwhile, riskier assets like AUD are taking hits from escalating geopolitical tensions in the Middle East, shifting central bank biases, and China’s growth and financial markets concerns.
This is probably factored into the EURAUD making higher highs and higher lows since late last week.
Can the pair maintain its uptrend?
Aside from overall risk sentiment, China’s key data release during the Asian session may influence the pair’s trends. Remember that we’ll see reports such as China’s GDP, industrial production, retail sales, fixed asset investment, and unemployment rate.
Disappointing economic reports could accelerate growth concerns for the world’s second-largest economy and draw in more AUD sellers.
We should also keep close tabs on potential catalysts, such as BOE Gov. Bailey’s speech, Canada’s inflation data, and FOMC member Waller’s speech in case they move the needle for overall risk sentiment.
Source : reuters.com | fxstreet.com | forexcrunch.com
