EUR/USD
The Euro has had a range bound session, albeit pretty whippy, as the US heads
towards the Thanksgiving weekend with the major event of the day being the
downgrading of the 3Q US GDP from 2.5% to 2.0%. The usual round of concerns
over EU bond yields, bank funding costs and political and economic
“soundbites” continue to weigh on the currency and keep the market very
nervous. European Equity markets all closed down. The DAX 1.2%, the
CAC40 -0.8%. The S+P is closing down 0.4%.
1.3420 continues to hold the downside though and the Euro is pretty much
unchanged from yesterday.
Technically the Euro is holding up pretty well.
If we were to push above 1.3570, we could well see some SL buying that may
take us through to 1.3620, and possibly onto 1.3690.
On the downside 1.3400/20 provides good support, but a session close under
1.3380 would suggest a continuation onto 1.3270.
That is unlikely to happen in the next few hours though and it would appear
that 1.3450/1.3550 should cover it. After that, take the lead from the European
equity markets.
There is a whole heap of data due out of the EU and then the US today as they
get ready for Thanksgiving including German/EU PMI, US Personal Consumption
Expenditure, Initial Jobless Claims, Durable Goods & Michigan Consumer
Sentiment.
AUD/USD
The AUD has struggled to bounce from the lows as European concerns continue
to weigh on sentiment. Increased Australian bank funding costs are becoming a
worry as European banks are forced to repatriate funds with recessionary
pressures growing. The Mining Tax got passed through the Lower House of
Parliament which will not help investor demand. A brief late Asia rally to 0.9898
was snuffed out and with the market remaining on edge over the situation in
the US, as well as Europe, little headway was made in either direction in what
was a rangebound session.
Technically the AUD looks as though it is gearing up for another push lower. The
shorter term indicators have largely unwound their oversold status and the lack
of bounce suggests that we may need to take a look at the Fibo support at
0.9710.
For today though, use the overnight range of 0.9808/0.9898 as a guide and look
for a continuation on a break of either side. The 4 hourly charts are still mildly
oversold but show little signs of turning higher.
Keep a close eye on the S+P. Currently hanging on to its 1185 support, a break
could see a swift move lower. Given that the US markets are closed tomorrow
for Thanksgiving, it will start to get very thin later in today’s session and any
move could be magnified. Given the concerns over Europe, a pre long w/e
position-covering selloff would not surprise, and if it were to occur, would
undoubtedly take the AUDwith it.
Today’s HSBC China PMI figure may shake things up a bit.
