EUR/USD
The Euro traded in a 1.3016/1.3118 range today as markets began to wind
down and volumes were generally thin.
The Italian Senate backed new austerity measures and the in the US, the Initial
Jobless claims dropped to 364K, the best figure since April 2008. The positive
news though is guarded as the market still has concerns over the possibility of a
downgrade of France before Christmas.
European equity markets finished on a positive note, up 1-1.5% and in the US
the S+P is currently up 0.75% with an hour of trading to go.
The Euro is now back at exactly yesterday’s level and unchanged also from the
beginning of the week. I don't think we should now expect too much, unless we
do see something unexpected from Europe, and 1.3000/1.3100 is likely to cover
it. The hourly and 4 hourly indicators have more or less flattened out, adding to
the view that the session is likely to be pretty quiet.
As we have said before, rallies towards 1.3200 present selling opportunities.
That largely still stands and for today and trendline resistance is currently at
around 1.3175. On the downside I would be looking to lighten up short
positions on dips to towards 1.3000.
Further out the recent lows at 1.2945 and the major support at 1.2870 should
protect any downside break of 1.3000. On the topside, should we see a break of
1.32, which I doubt, 1.3245 acts as Fibo resistance, ahead of 1.3300, congestion.
As for Asia today I would look at 1.3020/1.3120 to cover it.
This is the last report until Wednesday 28th Dec, when a limited report will be updated with the full report beginning again on Tuesday 3rd Jan.
AUD/USD
The AUD has made up some ground over the session, primarily on selling of
EUR/AUD which is making new all time lows at 1.2853. This looks like a false
break to me. The dailies are very oversold and the 4 hour charts are showing
divergence so I would not be selling the break down at this level. A bounce is
very possible.
As far as the AUD/USD is concerned, the indicators are pointing mildly higher
although I would not be getting too excited. Short term resistance at 1.0150 is
currently holding ahead of 1.0200 and 1.0218, the 21 Dec high. The downside
now sees short term support at 1.0100 and 1.0060. The lower level is unlikely to
be seen today and it would appear that we will go into Christmas somewhere
around current levels.
Further out it looks as though we may be in for a period of consolidation within
the 0.9900/1.0380 range. Above here would look at a return towards 1.05,
while a downside break would target 0.9660. It doesn't appear that either of
these are likely in the near future we may just move sideways.
Merry Christmas from everyone and AxiTrader
