EUR/AUD Offers Opportunity to Buy Above 1.4430 Resistance

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

Eurozone – German Ifo Business Climate Index

Today, at GMT 10:00 a.m., the Ifo Institute for Economic Research published 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 110.4, and this month, the forecast was set slightly higher, at 110.7. However, the actual figure came out much better than what the market was expecting, at 111.0.

Australia – CB Leading Index

Later, at GMT 4:30 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 traders 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.

Last month, the CB leading index increased by 0.5%, and over the last six months, it increased almost 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.

Trade Recommendation for the EUR/AUD

EURAUD - Technical Analysis for Australian Forex Trading Brokers - Dec 19-23 2016

Since the start of November 2016, the EUR/AUD has remained in a tight range between 1.4130 and 1.4430. Last week, the EUR/AUD once again got rejected from the support area around 1.4130 and currently approaching the 1.4430 level.

As the German Ifo Business Climate Index came out much better than expected, we believe there is a good possibility that the EUR/AUD price will break above the resistance near 1.4430 this week. However, Forex traders should only consider placing a buy order once the resistance is broken.

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 Trading brokers as soon as the pair closes above the 1.4430 level on the daily time frame. A possible profit target for this trade would be around the 1.4500 level. On the other hand, Forex traders should consider placing a stop loss order below 1.4390.

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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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