EUR/AUD May Turn Bullish If Key Resistance Near 1.4500 Breaks

EUR/AUD – Technical Analysis for Australian Forex Brokers & CFDs.

Australia – CB Leading Index

Today, at GMT 3:30 p.m., the Conference Board Inc will release the month-over-month leading index for Australia, which measures the changes in the level of a composite index based seven other major fundamental indicators.

Since the CB leading index aggregates some of the other indicator data, forex investors consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.

In October, the CB leading index remained unchanged by 0.0% but over the last six months, it increased every month. If the index increases once again this month, it may have a bullish impact on the valuation of the Australian Dollar against other major currencies.

Eurozone – German Flash Manufacturing PMI

On Wednesday, at GMT 8:30 a.m., the Markit will release the German Flash Manufacturing PMI data, which measures the level of a diffusion index based on surveying around 500 purchasing managers in the country.

Forex traders consider the Flash Manufacturing PMI figure to be a leading indicator of the German economic climate as purchasing managers usually has the insight regarding business conditions such as employment, production capacity and new bulk orders and inventory situation.

Last month, the German Flash Manufacturing PMI figure came out at 55.0 and the forecast for this month is currently set at 54.8.

Trade Recommendation for the EUR/AUD

EURAUD - Technical Analysis for Australian Forex Brokers - Nov 21, 2016

Since breaking below the uptrend line on September 21, 2016, the EUR/AUD price fell around 1.4200 level. But, over the last week, the EUR/AUD price retraced up by around 300 pips and currently trading near the major pivot zone around 1.4500.

As the Australian CB leading index remained unchanged last month and the German flash manufacturing PMI figure is expected to go down a bit, the fundamental outlook for the EUR/AUD would likely remain tentative. However, the current bullish momentum should push the price towards 1.4500 this week and test this resistance level before resuming the downtrend. If the 1.4500 level is broken, there is a good probability that the EUR/AUD price will continue to move upwards towards the 1.4580 level.

Under the circumstances, it would be recommended that Forex traders consider placing a BUY order at market price for the EUR/AUD with their Australian Forex brokers as soon as the pair closes above the 1.4500 level on the daily time frame. A possible profit target for this trade would be around the 1.4580 level. On the other hand, Forex traders should consider placing a stop loss order below 1.4470.

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Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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