EURAUD: Major Hurdle Sits at 1.4700 Ahead of Data-Heavy Week

The US dollar is seeing mixed performance against many of its major rivals in a quiet final session of the week, so we wanted to look a bit further afield at a cross that’s near a major level heading into the weekend.

EURAUD rallied early this week before stalling out against a key barrier at 1.4700, the 61.8% Fibonacci retracement of this year’s drop. The combination of a strong AU employment report, escalating fears about the lack of progress in Greek debt negotiations, and the aforementioned key resistance level finally took its toll on the pair, pushing rates back down to trade at 1.4550 as of writing.

Despite late-week dip, the secondary indicators are still generally bullish: the MACD is trending higher above its signal line and the “0” level, while the RSI is in a healthy uptrend of its own. These readings show that the buyers still have the upper hand, but next week’s busy economic calendar may determine whether they can maintain it.

Key Economic Data / News that May Impact EURAUD Next Week (all times GMT):

• Monday: Speech by ECB President Draghi (13:00)

• Tuesday: RBA Monetary Policy Meeting Minutes (1:30), German ZEW report (9:00), European Court of Justice Ruling on the Constitutionality of ECB’s OMT program (tbd)

• Wednesday: Eurozone CPI (9:00)

• Thursday: ECB TLTRO announcement (9:15), Eurogroup meetings (all day)

• Friday: ECOFIN meetings (all day)

While there’s little in the way of top-tier economic data, political meetings and announcements should keep EURAUD traders on their toes. If policymakers continue to carve out hard positions in the negotiations surrounding Greece, the pair could continue to fade back toward the 100-day MA near 1.4200. On the other hand, a breakthrough in Greek negotiations and/or solid ZEW report could take the pair through the 1.4700 barrier and expose the 78.6% retracement up near 1.50 later this month.