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EUR/AUD Likely to Break Above Key Resistance Zone if German Ifo Business Climate Goes Above 100
EUR/AUD Forecast -22nd June 2021
Australia – CB Leading Index
On Tuesday, at GMT 2:30 p.m., the Conference Board Inc will release the month-over-month leading index for Australia. It measures the changes in the level of a composite index based on seven other major fundamental indicators.
The CB leading index aggregates some of the other indicator data. So, top Australian brokers consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.
Last month, the CB leading index came out at 1.0%. If the positive trend continues, it will likely have a bullish effect on the Australian Dollar.
Eurozone – German Ifo Business Climate Index
On Thursday, at GMT 8:00 a.m., the Ifo Institute for Economic Research will publish this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index. It is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.
Since the survey has a large sample size compared to similar studies, Forex traders consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.
Last month, the German Ifo Business Climate index came out at 99.2. This month, analysts are expecting it to go up slightly and come out at 100.8.
EUR/AUD Forecast
Since March 2020, the EUR/AUD remained in a strong downtrend. However, on February 25, 2021, it reached a lot of 1.5252 and formed a bullish outside bar. As a result, the EUR/AUD started a bullish retracement. Since then, the EUR/AUD has moved up by around 600 pips or 3.93 per cent. Last Friday, it reached the 100-day moving average. Over the last two days, this moving average appears to have provided ample resistance to bulls. Currently, it is trading above the pivot zone around 1.5825 and continued to test this major resistance zone.
The German Ifo Business Climate will likely grow over 100 level over the last month. On the other hand, the Australian CB Leading Index went up by 1.0% last month but it carries little significance compared to the German data. We believe it would set a bullish fundamental outlook for the EUR/AUD this week. Therefore, if the EUR/AUD closes above the resistance near 1.5870, it would likely attract additional bullish momentum in the market.
Hence, CFD traders should look out for trading opportunities above this major resistance level of around 1.5870.
Market Analyst / Trading Consultant . Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com
