EURAUD Looking For Lift OffEURAUD looks poised to breakout here. Price has been holding in a block of consolidation between the 1.5671 level support and resistance at the 1.5876 level, sitting in the lower portion of a large triangle pattern. With both MACD and RSI bullish here, and with the market pressuring the topside level once again, bulls can look for a test of the 1.6163 on a break higher here. The retail market is currently around 65% short, suggesting plenty of room for a bullish advance as the market clears this level.Risk assets are under heavy pressure this week with equities slumping ahead of the January FOMC and in response to geopolitical risks around Russia/Ukraine tensions. With AUD taking the brunt of these negative risk flows, EUR looks set to gain further across the week.Keep An Eye OnAussie CPI is due overnight tonight. On the back of a dismal set of January PMI’s and with consumer confidence seen plunging also, AUD is having a hard time currently. Should tonight’s CPI reading underperform also, AUD is likely to see exacerbated selling pressure near term. Looking ahead to the FOMC, any USD strength in response to the meeting is likely to again hit AUD harder than EUR given the expected fall back in risk assets, further supporting this trade idea.
Source: Tickmill
