FX:EURAUD   Euro / Australian Dollar
Mid term
- Retrace gaining ground, today will have retraced all of the bull move.
- EURAUD trades as risk asset, SPX recovered today and on its way to form a hammer on daily candle (hence rebound in EURAUD ), IF SPX rallies, pair could fall further.
- As the PA in retrace slows, look to go long in one of the FIB retrace levels.

Long term favors BUY-
- Nordea Market calling for 1.605 target in eur/aud to quote- "EUR/USD: The 1.13 handle seems re-installed as the anchor of the pair and as we see a decent chance of rebound in the Euro area PMI this week, we think the short-term outlook for the EUR is starting to look a little more constructive. Due to the usual strong USD into year-end we opt to reflect our more constructive EUR view via long EUR/AUD targeting 1.6050."
https://e-markets.nordea.com/api/researc...
- DE-AU 10Y spread tightening @ 219
- Trade war worries
- Australian GDP fail, housing market downturn, retail sales was as expected.
- EU econ data better recently but still worries of Brexit, French protest and Italy budget (BTP spread better at 284 versus 300 level)
Comment: Retrace trade (short term)

If price breaks 1.589, look to go short (4 lots with stop loss in the closing of the last 4 hr candle), take two lots profit equal to stop loss and two lots target 1.5730 (and adjust s/l accordingly)


Long term buy at 1.5630 depending on how fast we get there.
Comment: - CORRECTION If price breaks 1.5780, look to go short (4 lots with stop loss in the closing of the last 4 hr candle), take two lots profit equal to stop loss and two lots target 1.5730 (and adjust s/l accordingly)

Long term buy at 1.5630 depending on how fast we get there.
Comment: Additional notes -

EUR/AUD correlation is -92.7 to AUD/USD and 78 with EUR/USD, meaning it moves more with AUD/USD. Currently AUD/USD is on its way to form an inverted hammer on daily, could signal a Temp end to AUD/USD downtrend if PA follows through it could mean a deeper correction in EUR/AUD

https://www.mataf.net/en/forex/tools/cor...
Comment: Further confirmation of possible deeper correction based on correlation pairs -

EUR/AUD highest correlation on daily-

AUD/USD - 92.7
EUR/USD - 78
GBP/AUD - 91.9

EUR/AUD is currently more correlated to GBP/AUD, gbp/aud down today for 247.

https://www.mataf.net/en/forex/tools/cor...
Comment: Update This pair has further room to fall.

Positive developments for AUD - improvement in trade talks, china reducing tariffs on car import, Westpac Consumer Sentiment just at .1%

Big negative for EUR is the French German yield spread widening to 47.6 highest since may
Comment: PA bouncing bouncing off support -wait for break out confirmation

Comment: ECB bit dovish today.
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