Talking Points:
– EURUSD has been tracking daily 13-EMA, now at 1.2925/30.
– EURAUD 8-EMA support pushes it towards apex of consolidation.
– See the DailyFX Euro Economic Calendar for the week of September 21, 2014.
Euro-Zone economic data came out roundly weaker than expected today, but there has been little reverberating impact on the EUR-complex. The lack of impact stemming from the disappointing preliminary German and Euro-Zone PMI readings for September may have to do with expectations for easing: the stimulus pipeline was saturated but yet not unleashed during the data collection period.
Certainly, Euro-Zone economic data has been in the gutter, but has improved modestly in recent weeks. The Citi Economic Surprise Index, a proxy for data momentum, is at -39.1, but off the yearly low of -53.8 on September 3. If data momentum is bottoming out and hopes that easing could lead to actual growth proliferate, further Euro weakness in the immediate future may be difficult.
We thus turn to intraday and intraweek charts as EURUSD’s breakdown on the H4 timeframe is looking less and less bearish, while EURAUD price action is acting unorthodox relative to its nature during the downtrend. See the above video for technical considerations in the two pairs.
Read more: EUR/USD at Key EMA in Recent Breakdown, AUD/USD Fails at Pivot Retest
— Written by Christopher Vecchio, Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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Source: Daily fx