EUR/USD
The Euro eventually enjoyed a better session today although conditions were
volatile again, with an initial move down to 1.3483 before recovering to a high of
1.3653. The news from Europe was slightly more positive, with Greece naming a
new PM, who will lead the unity government until elections in February, with the
mandate of signing up to the austerity measures in the expectation that the next
tranche of the bailout package will be released. Across in Italy, pressure mounts on
Berlusconi to move along quickly. Italy sold €5bn of 1-year bonds at an average
yield of 6.087% - a record high, but better than expected this time yesterday, while
elsewhere, Germany and France have reportedly discussed plans for a potentially
smaller Euro zone. European Equity Markets recovered from their early lows today
with the DAX+0.86%, CAC -0.34%, MIB+1%, FTSE -0.28% and the S+P is going into
the US close +0.85%
Important to note that the EU commission has drastically cut its 2012 outlook for
European Growth in 2012 from 1.8% to 0.5%, which will stop the Euro from running
away to the upside. The constant stream of news is very difficult to keep up with, so
when in doubt, turn to the charts!
Technically, in the short term at least, the Euro looks to have some momentum to
continue higher. Immediate resistance lies at the 23.6% of the move down from
1.4253//1.3483 at 1.3660. This is likely to cap Asian trade. The daily charts are still
pointing lower though and rallies should provide opportunities for the next leg
down, with the first target being today’s low 1.3480 and then on to 1.3405 Fibo
support. Above 1.3750 would negate this for further range trading. Asia today can
look at 1.3560/1.3660 in the absence of further news.
Conditions will be thin later on due to the Veterans Day holiday and data is limited
to the Michigan Consumer Sentiment Index. Hopefully it will be a quiet Friday, Good
luck.
Good W/E
AUD/USD
The AUD took its usual hit in late Asia/early Europe, trading down to 1.0050,
before recovering as sentiment improved, to a high of 1.0208 and then gyrating
within the 1.01/1.02 area for the balance of the session. Not easy to trade, but
great for putting in conservative levels to buy and sell, as it continues to trade
nicely from a technical point of view.
For today’s session it would appear that 1.0100/1.0175 may cover it until
Europe. Outside this 1.0170/1.0200 should provide ample parameters.
In the longer term the daily charts suggest that we still have lower levels ahead
of us and I suspect a test of 1.000 isn’t too far away. A negative headline from
Europe and we could be there in an instant, but before then, play it safe.
A move above 1.0240 now would give cause for some reassessment and I would
be leaving SL around the 1.0270 on short positions, but until then look for levels
to join offers.
