In our weekly review, we noted that while both currency pairs were bullish and up ahead would be significant resistance regions. It remained to be seen if the bullish momentum would continue.
An important observation would be that both the EUR/USD and AUD/USD had attempted a number of times to breach the main support line. 1.12 and 0.7 respectively. This suggests bearish undertones.
AUD/USD Technical Analysis
Looking at the hourly AUD/USD chart above, we see a continuation of the bullish climb. Having said so we are close to a significant resistance region. It is 0.71 and is highlighted on the chart. You can see the previous price interactions at this region. Should the momentum be stopped, a bearish return may open up the path for a retest of 0.7.
EUR/USD Technical Analysis
We are seeing a similar trend with the EUR/USD. As the currency pair climbs, it is fast approaching the significant resistance region of 1.14. It remains to be seen if the resistance would be breached. As a popular point of reference for many, it is likely that price action in that zone will be highly sentimental in nature.
The German ZEW Economic Sentiment which is a survey of around 300 German institutional investors and analysts on the next 6 months economic outlook for the country, came in much better than expected. Instead of -11, it was recorded to be -3.6. Considering that Germany is the largest economy in the Euro Zone and that this survey is a leading indicator of economic health, positive sentiments were probably added to the market.
All Hands On Deck
In the next few hours, we are expecting more important economic events and releases. The US Federal Reserve will release the commentary of it’s latest interest rate decision. Any unexpected developments may add volatility to the market. A forecast of inflation and economic growth over the next 2 year will be released too, providing more information for analysis.
The Australian employment figures will be released later and needless to say, it will be important as employment is a fundamental part of the economy.
The EU Economic Summit is due to happen and this is to facilitate a Brexit related vote on whether to approve the UK request for an extension on Article 50. This concerns the Euro Zone directly and may affect the euro currency based on the perception of the outcome.