EUR/USD
The Euro has stabilised in the current session following a successful Spanish
bond auction and some improved data from the US. IMF Chief, Christine
Lagarde dampened enthusiasm though with a fairly gloomy outlook on global
growth and S+P has downgraded 10 Spanish banks. All in all it has been pretty
quiet and consolidative session following the recent move lower.
The DAX and CAC40 traded higher by 0.98% and 0.76% respectively. The S+P is
closing the US session +0.3%
Technically, nothing has changed from a price perspective as the Euro spent the
day within a 1.2950/1.3050 range. Beneath the session lows of 1.2956, the
market will target the Dec 2010 lows of 1.2870 and below here the 76.4% Fibo
support level is to be found at 1.2600.
Minor resistance remains in place at 1.3050 and above here 1.3145 and 1.3250
should contain bounces. Above 1.3300 would mean a return to more
consolidative conditions but this looks unlikely at present. The short term
indicators have recovered from their oversold status, although the 4 hours are
still recovering and hint of possible upside movement. It could well be though,
that we continue to see more directionless trade either side of 1.3000, before
once again heading lower to test levels around 1.2870 target. The longer term
indicators continue to point to lower levels and ultimately I suspect that if we
do see any bounces, they are merely selling opportunities.
As far as Asia is concerned, it is hard to see a move outside the day’s range and
1.2980/1.3050 should cover it. It would not surprise to see a squeeze later for
1.3100 but I think any strength is likely to be temporary.
Today sees the US CPI data. Good luck, Good w/e.
AUD/USD
The AUD has partially recovered from yesterday’s lows of 0.9860 to see a high of
0.9988 before retreating and spending the session within the range. There
really is not a lot to add today. A return to the 0.9860 lows would then target
0.9775, which would close the gap caused by the Friday close/Monday open of
2 weeks ago. Beneath here 0.9660 (23/11 low) would attract.
On the topside, look to resistance at 0.9890, and then 1.0050 to provide
barriers. The 4 hourly charts are recovering from oversold and squeezes to the
topside look likely, but temporary, before we once again head lower. For Asia
today I don't think we should expect too much and 0.9880/0.9980 should easily
hold it. The S+P index has had a mildly positive session (+0.3%) and this has
been reflected in the AUD, although commodity prices are pretty flat so I would
not expect too much volatility today. The daily indicators continue to suggest
that we do have lower levels ahead of us and that strength, if seen, should be
short lived.
