At the time of writing, EUR/AUD is the biggest mover for today, down -97 pips or -0.61%. The selloff is partly due to Aussie’s strength on US-China trade optimism. It also lifts US stocks and to a lesser extend Dollar. Focus is back on Euro as Italy might submit revised budget to EU in the next 24-48 hours. Also, traders seem to be repositioning themselves, guarding against dovish ECB press conference on Thursday.
Nevertheless, the fall from 1.5887 is seen as a corrective pull back for now. The cross just had a strong rebound ahead of 1.5271 cluster support (38.2% retracement of 1.3624 to 1.6357 at 1.5313). The development argues that price actions from 1.6357 medium term top are developing into sideway consolidation, rather than a deep correction.
Hence, we’d expect rise from 1.5346 to extend into 1.5984/6357 resistance zone at least, before completion. So current retreat from 1.5887 should be contained by 1.5596 minor support to bring another rise. Nevertheless, break of 1.5596 will dampen this view and turn focus back to 1.5271/5313 zone.
