EUR/AUD Resumes Uptrend Amid Forecast of Reasonable German Producer Price Growth

Home » EUR/AUD Resumes Uptrend Amid Forecast of Reasonable German Producer Price Growth

Australia – MI Leading Index

On Wednesday, at GMT 12:30 a.m., the Melbourne Institute will release the month-over-month MI Leading Index figure. It measures the level of a composite index based on 9 economic indicators.

The design of MI Leading is primarily to predict the direction of the economy and institutional investors pay attention to this index. Also, key policy makers in Australia follow the index as it is derived from a combination of a total 9 economic indicators. Hence, it is considered by binary options investors to be a leading indicator of the Australian economy.

Last month, the MI Leading Index decreased by -0.1%. If the trend continues and it decreases again, it will have a bearish effect on the Australian Dollar.

Eurozone – German Producer Price Index

On Friday, at GMT 6:00 a.m., the Destatis will release the German Producer Price Index (PPI). It measures the changes in the price of sold goods by the German manufacturers in the previous month.

Manufacturers increase their prices when the cost of production goes up. Hence, Forex traders consider the German PPI to be a leading indicator of the overall German consumer inflation. Also, its consumer inflation situation can have a substantial impact on the valuation of the Euro.

Last month, the German PPI went up by 1.3%. This month, analysts are expecting it to grow at a much slower pace, at 0.8%.

EUR/AUD Forecast

The EUR/AUD remained bullish since the end of February 2021. Over the last several months, it has climbed up by over 590 pips. It started a minor bearish retracement in the first week of August. However, over the last few days, the EUR/AUD has resumed the uptrend. It is currently approaching the resistance near the 1.6120 level.

The Australian MI Leading Index went down last month and it may continue the downtrend. However, the German PPI will likely go up by 0.8%. We believe it would set a bullish fundamental outlook for the EUR/AUD this week. Therefore, if the EUR/AUD closes above the resistance near 1.6120, it would likely attract additional bullish momentum in the market.

Hence, binary options traders should look out for trading opportunities above this major resistance level around 1.6120.

 

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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