EUR/AUD – Technical Analysis for Forex Trading & CFDs.
Australia – Consumer Price Index
On Wednesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter consumer price index (CPI) figure that measures the changes in the price of goods and services bought by Australian consumers in the last quarter.
Since the consumer price index is primarily used by the Australian central bank to measure inflation, any significant change in the CPI often makes the Forex market extremely volatile. Also, as the inflation at the retail level has a big influence on the central bank’s future monetary policy. Hence, it is considered by Forex traders to be a leading indicator of the Australian economy.
Last quarter, the Australian consumer price index decreased by 0.2% and the forecast for this quarter is set at an increase of 0.8%.
Eurozone – German Ifo Business Climate Index
Later, at GMT 8:00 a.m., the Ifo Institute for Economic Research will publish this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index, which is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.
Since the survey has a large sample size compared to similar studies, Forex investors consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.
Last month, the German Ifo Business Climate index came out at 115.2, and this month, the forecast was set slightly higher, at 115.3.
Since the start of April 2017, the EUR/AUD has remained bullish and formed a well-respected uptrend line in the process. However, for the last few weeks, it mostly traded sideways and remained range bound between 1.4835 and 1.5185 levels. Unless the EUR/AUD breaks in either direction, we believe it will likely remain range bound this week as well.
However, since the German Ifo Business Climate Index reading is expected to come close to last months, but the Australian consumer price index is expected to increase by 0.8% in the last quarter, we believe it would set a bearish fundamental outlook for the EUR/AUD this week. Therefore, if the EUR/AUD closes below the support near 1.4835, it would likely attract additional bearish momentum in the market.
Hence, Australian Forex traders should look out for trading opportunities below this major support resistance level around 1.4835.