EUR/USD
It is Thanksgiving and very thin conditions prevail. Not a lot to add from
yesterday, and no calamities from Europe mean that we are not too far away
from previous levels. German yields climbed slightly after yesterday’s bund
auction result (to la level, above UK gilts!) and Merkel and Sarkozy have been
meeting again with the new Italian PM, Monti, to no great effect apart from the
usual rhetoric about ensuring a strong, stable Eurozone and full support for Italy
etc. etc…..The Dax fell 0.5% following Merkel’s insistence that Eurobonds are
not an option, and the CAC was pretty much flat.
All this means is that the Euro struggled to 1.3410 after the better than
expected IFO number, before dropping swiftly, in very thin conditions to 1.3315
and then correcting into the middle of the day’s range. All in all, there is nothing
very exciting to report.
Technically there is nothing new, so to repeat yesterdays view:
Given that we have the Thanksgiving long w/e, I think Asia may again see a
range of 1.33/1.34, as the short term oscillators recover from being oversold.
The downside for the session should be relatively limited, and although the
trendline support of 1.3270 is only 60 points away at present, I’d be very
surprised to see Asia push it under here. The topside continues to look covered
for now by 1.3420 resistance, following the overnight high of 1.3410. The
divergence in the charts continues to warn of a possible short term bounce, and
a return to 1.35/1.36 cannot be ruled out.
If/when 1.3270 gives way, we can look towards 1.3130 as the next target. In the
meantime use 1.3270/1.3420 as a guide. This should easily cover it today and
further out, look for rallies to 1.3520, possibly 1.3620 to sell into for the next leg
lower
No economic data today. Have a good w/e.
AUD/USD
Not a lot new to add today, apart from RBAs Stevens revelation yesterday that
Europe’s debt issue could hurt Australia. Shock!
Technically the AUD remains heavy and in the process of unwinding the short
term oversold conditions that currently govern the situation. Further bounces
remain possible, but in all likelihood today will be quiet.
The major support level looks to be at 0.9625 and under here 0.9600 would
provide a psychological base. Further out a return to the 0.9385 looks
increasingly possible. To maintain the downtrend, bounces should now be
limited to 0.9900. Immediate resistance would appear at the overnight high of
0.9785 and 0.9830 so leave room to allow for selling into strength.
For today’s session bounces again look to be fairly limited
