Daily Trade Recommendation

Trade Recommendations for current Session

Today I’m looking for selling opportunities on EUR/AUD, this is following the AUD strengthening overnight amidst building approval data reaching a 3 month high.Also we have commentary coming from the ECB today which is expected to be negative prompting the market to sell the EUR further.

I would be looking to get into this position if the Euro rallied back up to around 1.4400 or the 1.4425 area, I would then be looking to place a stop loss around 1.4485 with a profit target anywhere around the 1.4350 area.

Overall Bias on this trade

Today we have commentary from the ECB which given the current situation the economy is in and with the ABS programs details emerging we can only expect the ECB to release further dovish commentary prompting a further Euro sell off.

The only reason that would cause the Euro not to sell off is if the ECB surprised the market by not being bearish enough and by that I mean not referring to the imminence of purchasing of high risk debt with the extended risk of QE on the horizon if the economy doesn’t start to gain momentum.

Couple this with the fact that the AUD recovered slightly on what has been an abysmal few weeks for the two Australasian currencies given such weak sentiment coming from their respective central banks and the correlated Chinese economy.

If you recall yesterday’s trade call where I was advising to sell the AUD this was solely due to further weak sentiment and stressed that the AUD remained bullish fundamentally given that the RBA will have to consider a rate hike soon as long as inflation stays at the top end of their 2-3% target, it seems that overnight with the positive data coming from the Australian economy the market has taken this as a trigger to start buying it back given that it was at an attractive price for a fundamentally attractive currency.