EUR/USD
It has been a choppy session for the Euro today. Poor data from the EU and
Germany and increasing Eurozone concerns, resulting in rising EU bond yields,
where Italy Spain and France all had bad days (As did Austria, Belgium, Portugal
& Slovenia) had the Euro under early pressure, before it was able to rally on
more solid US economic numbers. Italy moved back above 7%, France to 4.54%
and Spain to 6.27%. The normal rumours and counter rumours have been doing
the rounds, all in all making it a choppy session, but thus far holding on to the
support at 1.3483. The EU equity markets all finished lower. The DAX -.087%,
the CAC -1.92%, but the US markets have managed to rally since they closed,
led higher by Retail Sales (+0.5%) with the S+P +0.8%.
Technically, the Euro still remains heavy, but off the days lows at 1.3495. The
way the charts are looking I would expect these to hold for the coming session
as the short term conditions are showing an element of divergence that may
provide rallies to sell into. It is quite plausible though that 1.3483 support could
be tested, and if taken out, further selling could see us move down to the next
support around 1.3440. I’d be surprised though if we were to trade below here
in the near term.
On the topside, minor resistance is at 1.3570, and it would be no surprise to see
this tested. Above here, 1.3615 and 1.3650 offer short term Fibo resistance. If
seen I would expect sellers to emerge, looking for the next leg lower, which by
then may have the legs to take us under 1.34.
For Asia today look at 1.3500/70 to provide a guide, with a mild bias to the
upside.
Today sees EU and US CPI figures.
AUD/USD
The AUD traded in choppy but heavy fashion for much of the session, moving
close to 1.0100 support before rallying after the European close as US Equities
began to rally.
Immediate intraday resistance now comes in at 1.0200 and then at 1.0230,
while short term support is to be seen at the overnight low of 1.0112. Much of
the direction will depend on the situation in Europe, but to me it appears that
we might be in for a session or two of USD weakness, as pointed out by the
divergence, apparent in the USD/CHF and to a lesser extent, in the Euro Charts.
I’d therefore be a bit wary of being short at the lower end of the current range,
while at the same time feeling that the overall downtrend towards 1.000
remains intact.
For Asia I suspect 1.0130/1.0230 ought to cover it, but would want to leave
space to be able to take advantage of selling into rallies, rather than being
squeezed out.
Above 1.0340, would negate the current negative view and likely see more
consolidative trading. Until then 1.000 remains the medium term target.
Today sees the WBC leading indicators and 3Q Wage Price Index
