Chart of The Day EURAUD
EURAUD Probable Price Path & Potential Reversal Zone
EUR: Eurozone’s GDP contracted 0.7% in 4Q, more than initially estimated: Eurozone’s 4Q GDP contracted more than initially estimated according to the final reading; the new reading was revised down to -0.7% q/q (from -0.6% prior). The annual rate was a tad better, revised higher to -4.9% y/y (from -5.0%). In 3Q, GDP expanded by 12.5% q/q and contracted 4.2% y/y. This reflects the impact of tighter restrictions put in place by governments as new waves of coronavirus spread across Europe in the last quarter of 2020. Despite that, employment rose 0.3% q/q in 4Q (3Q: +1.0%) and was 1.9% y/y lower compared to the same quarter in 2019, supported by more robust job protection schemes.
AUD: Australia’s business and consumer confidences picked up in February: The NAB Business Confidence Index picked up to 16 in February, from 12 in January. This reflects stronger assessment of business conditions (+6pts) as well as other factors such as trading, profitability, employment as well as forward orders. Businesses also expect capex to improve, pointing to solid recovery ahead towards the end of 1Q and beyond barring from any spike in new Covid-19 cases. In a separate report, the Westpac Consumer Confidence Index rose 2.6% m/m to 111.8 in March (Feb: 109.1), marking its second monthly gain in a row. This reflects favourable assessment of current condition as well as the climate to buy major household items. Consumers trimmed their overall economic expectations as well as family finances and the economy one year ahead.
From a technical and trading perspective, the EURAUD is in the mature phase of its current bearish cycle, as 1.56 contains upside attempts then a likely wave 4 high is in place for, bearish exposure should be rewarded on a breach of 1.54 opening a downside extension to retest and ultimately breach 1.5250 enroute to an ideal wave 5 equality objective at 1.4995 which also represents trend channel and monthly projected range support.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!