Chart of The Day EURAUD

EURAUD Potential Reversal Zone & Probable Price Path

EUR: The Eurozone Purchasing Managers' Index fell significantly, and the US Purchasing Managers' Index hit a multi-year high. The euro failed to stabilize at 1.19 against the US dollar. It fell by 0.4% to 1.18 at most, and closed at 1.184. The worsening epidemic in Europe dragged down the euro zone in November purchasing managers index fell from 50 to 45.1 service sector purchasing managers index fell to 41.3, the lowest five months later, the manufacturing purchasing managers index fell to 53.6. German media reported that local governments have stated that if the epidemic is not under control, they will propose to extend the lockdown measures for two weeks to mid-December. Barnier, the chief negotiator of the European Union's Brexit, said that the online negotiations with the British representatives continue, and differences still exist. British media reported that the two sides have negotiated 90% of the trade agreement

AUD: The progress of the global epidemic is expected to dominate the performance of commodity currencies such as the Australian dollar. Preliminary data from Australia show that exports in October rose 6% month-on-month, mainly due to the increase in iron ore exports to China. Queensland announced that it will reopen to residents of New South Wales, including Sydney, from December 1. If Victoria, where Melbourne is located, successfully has no cases of unknown origin for 28 consecutive days, Queensland will also reopen to residents of Victoria.

From a technical and trading perspective, the EURAUD appears to be completing a cycle from the October swing high, the second test of projected monthly range support and the weekly s3 is seeing a bid develop in the market, note this pattern is accompanied by significant momentum divergence. Counter trend traders will look for a breach of the prior H4 highs to set long positions initially looking for a retest of the pivot cluster at 1.6230, through here will open the potential for a test of the 50% retracement of current cycle at 1.6450. On the day a loss of 1.61 would negate the near term corrective thesis opening a move to test the 1.5970 5th wave equality objective.

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.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% 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.