The Upcoming Economic Data of AUD could affect EURAUD ,AUD Cash Rate: Forecast 4.10%, Previous 4.35%,RBA (Reserve Bank of Australia) Monetary Policy Statement and RBA Rate Statement all are red folders with volatility
Cash Rate Cut: The forecast indicates a cut in the AUD cash rate from 4.35% to 4.10%.
Impact: A rate cut typically weakens the currency. Lower interest rates make the currency less attractive to foreign investors seeking higher returns.
RBA Monetary Policy Statement and Rate Statement: These statements provide insights into the RBA's outlook on the economy and future monetary policy decisions.
Hawkish Tone: If the RBA statements suggest that the rate cut is a one-off event and that the central bank remains vigilant about inflation, it could mitigate the negative impact of the rate cut on the AUD.
Dovish Tone: If the RBA statements indicate further rate cuts are likely or express concerns about economic growth, it would likely reinforce the bearish sentiment for the AUD.
Potential Impact on EURAUD on tuesday;
Bearish Scenario: If the RBA cuts rates and issues a dovish statement,EURAUD is likely to UPSWING and if they remain hawkish EURAUD will sell.
On Friday EURZONE data print will be released and it will bring volatility.
Eurozone PMI data releases might affect the EUR/AUD trade directional bias this week.
To better Understanding the Data we will start with the Purchasing Managers Index (PMI): A PMI is derived from surveys conducted among purchasing managers in key business sectors, such as manufacturing and services. A reading of 50.0 and above indicates optimism and industry expansion, while a reading of 49.9 and below suggests pessimism and possible industry contraction.
Flash PMI: A preliminary release that provides an early snapshot of economic activity for the month.
French Flash Manufacturing PMI: Actual 45.3, Forecast 45.01
French Flash Services PMI: Forecast 49.0, Previous 48.21
German Flash Manufacturing PMI: Forecast 45.4, Previous 45.01
German Flash Services PMI: Forecast 52.4, Previous 52.51
Eurozone Flash Manufacturing PMI: Forecast 46.9, Previous 46.61
Potential Scenarios and EUR/AUD Trade Bias:
Scenario 1: Mixed PMIs with Services Outperforming Manufacturing:
Likelihood: Given that the French Flash Manufacturing PMI beat expectations while remaining in contraction, and the German Flash Services PMI is expected to stay in expansion, this scenario is plausible.
EUR Impact: The euro tends to react with strong directional bias and volatility to PMI releases. If services PMIs rise high enough to pull composite PMIs into growth territory, then EUR traders may price in more interest rate hikes from the European Central Bank (ECB).
EUR/AUD Bias: In this scenario, EUR may gain pips against currencies that have less hawkish central banks. If the data supports expectations of ECB rate hikes, the EUR/AUD may experience bullish momentum.
Scenario 2: Manufacturing PMIs Miss and Services Sector Cools:
Likelihood: If manufacturing PMIs miss estimates and the service sector cools enough to stagnate or contract Euro Area growth, then the probability rises that markets may price in a lower rate hike or even a rate hike pause from the ECB.
EUR Impact: A lower rate hike or pause from the ECB is generally bearish for the EUR.
EUR/AUD Bias: In this case, look out for a sustained downside break and/or a retest-hold of the triangle pattern before considering a short risk management plan,
Review Technical Indicators: If you expect the fundamentals to push the euro higher / Aussie lower this week, be an the lookout for a sustained upside break and/or a retest-hold of the triangle pattern before considering a long risk management plan4. And vice versa if you expect the fundamentals to push the euro lower / Aussie higher this week, be an the lookout for a sustained downside break and/or a retest-hold of the triangle pattern before considering a short risk management plan.
Watch the Trendlines holding as support as all indication shows that if the trendline breaks, then it could trigger an event to open fresh bearish positions.
Trade with caution
Cash Rate Cut: The forecast indicates a cut in the AUD cash rate from 4.35% to 4.10%.
Impact: A rate cut typically weakens the currency. Lower interest rates make the currency less attractive to foreign investors seeking higher returns.
RBA Monetary Policy Statement and Rate Statement: These statements provide insights into the RBA's outlook on the economy and future monetary policy decisions.
Hawkish Tone: If the RBA statements suggest that the rate cut is a one-off event and that the central bank remains vigilant about inflation, it could mitigate the negative impact of the rate cut on the AUD.
Dovish Tone: If the RBA statements indicate further rate cuts are likely or express concerns about economic growth, it would likely reinforce the bearish sentiment for the AUD.
Potential Impact on EURAUD on tuesday;
Bearish Scenario: If the RBA cuts rates and issues a dovish statement,EURAUD is likely to UPSWING and if they remain hawkish EURAUD will sell.
On Friday EURZONE data print will be released and it will bring volatility.
Eurozone PMI data releases might affect the EUR/AUD trade directional bias this week.
To better Understanding the Data we will start with the Purchasing Managers Index (PMI): A PMI is derived from surveys conducted among purchasing managers in key business sectors, such as manufacturing and services. A reading of 50.0 and above indicates optimism and industry expansion, while a reading of 49.9 and below suggests pessimism and possible industry contraction.
Flash PMI: A preliminary release that provides an early snapshot of economic activity for the month.
French Flash Manufacturing PMI: Actual 45.3, Forecast 45.01
French Flash Services PMI: Forecast 49.0, Previous 48.21
German Flash Manufacturing PMI: Forecast 45.4, Previous 45.01
German Flash Services PMI: Forecast 52.4, Previous 52.51
Eurozone Flash Manufacturing PMI: Forecast 46.9, Previous 46.61
Potential Scenarios and EUR/AUD Trade Bias:
Scenario 1: Mixed PMIs with Services Outperforming Manufacturing:
Likelihood: Given that the French Flash Manufacturing PMI beat expectations while remaining in contraction, and the German Flash Services PMI is expected to stay in expansion, this scenario is plausible.
EUR Impact: The euro tends to react with strong directional bias and volatility to PMI releases. If services PMIs rise high enough to pull composite PMIs into growth territory, then EUR traders may price in more interest rate hikes from the European Central Bank (ECB).
EUR/AUD Bias: In this scenario, EUR may gain pips against currencies that have less hawkish central banks. If the data supports expectations of ECB rate hikes, the EUR/AUD may experience bullish momentum.
Scenario 2: Manufacturing PMIs Miss and Services Sector Cools:
Likelihood: If manufacturing PMIs miss estimates and the service sector cools enough to stagnate or contract Euro Area growth, then the probability rises that markets may price in a lower rate hike or even a rate hike pause from the ECB.
EUR Impact: A lower rate hike or pause from the ECB is generally bearish for the EUR.
EUR/AUD Bias: In this case, look out for a sustained downside break and/or a retest-hold of the triangle pattern before considering a short risk management plan,
Review Technical Indicators: If you expect the fundamentals to push the euro higher / Aussie lower this week, be an the lookout for a sustained upside break and/or a retest-hold of the triangle pattern before considering a long risk management plan4. And vice versa if you expect the fundamentals to push the euro lower / Aussie higher this week, be an the lookout for a sustained downside break and/or a retest-hold of the triangle pattern before considering a short risk management plan.
Watch the Trendlines holding as support as all indication shows that if the trendline breaks, then it could trigger an event to open fresh bearish positions.
Trade with caution
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.