Forex Market: EUR/AUD trading forecast for Monday

During Friday’s trading session EUR/AUD traded within the range of 1.4371-1.4446 and closed at 1.4418, gaining 0.07% for the day and 0.87% on a weekly basis.

Fundamental view

Confidence among investors in the Euro zone was probably lower during the current month, with the corresponding index coming in at a reading of 9.0. In July it stood at 10.1. The index is based on results from the SENTIX survey, one of the most prominent surveys, reflecting investors’ opinion in Germany. It encompasses 2 800 respondents, with 510 of them being institutional investors. Respondents present their expectations regarding ten different markets for a period of one and six months. Readings above zero indicate that respondents were predominantly optimistic, while readings below zero show pessimism. Higher than expected readings would provide support to the common currency. The official result is expected at 8:30 GMT on Monday.

At the same time, the annualized index of producer prices (PPI) in the Euro zone probably reached -1.0% in June, according to the median estimate by experts, from -1.0% in May. This index reflects the change in prices of products, sold by manufacturers during the respective period. The PPI differs from the CPI, which measures the change in prices from consumer’s perspective, due to subsidies, taxes and distribution costs of different types of manufacturers in the region. In case producers are forced to pay more for goods and services, they are more likely to pass these higher costs to the end consumer. Therefore, the PPI is considered as a leading indicator of consumer inflation. Lower than expected producer prices would have a bearish effect on the euro. Eurostat is to release the official report at 9:00 GMT on Monday.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.4412. In case EUR/AUD manages to breach the first resistance level at 1.4452, it will probably continue up to test 1.4487. In case the second key resistance is broken, the pair will probably attempt to advance to 1.4527.

If EUR/AUD manages to breach the first key support at 1.4377, it will probably continue to slide and test 1.4337. With this second key support broken, the movement to the downside will probably continue to 1.4302.