EUR/USD
Despite all the gloomy expectations, 2012 got off to a flying start with generally
solid data from around the globe, starting with the China PMI yesterday and
finishing with strong US ISM manufacturing index, which rose to 53.9 in December
against an expectation of 53.2. Sentiment proved strong as equity markets rose
strongly with the S+P following European markets, currently up around 1.6%. The
US $ has remained generally pressured today with the commodity currencies
performing particularly well.
The Euro has recovered, not taking long to break back above 1.3000 and now sits
just below the session high at 1.3073. The outlook remains choppy but further gains
look possible as both the 4 hour and the daily indicators point higher.
In spite of the more bullish news today though, things were put into perspective by
a warning from Greece that unless the EUR130 billion is signed, it would have to
pull out of the EU and leave the Euro. Watch this space closely.
Immediate resistance is to be seen at around 1.3100, where the Euro sat over the
Christmas break. Above here, the 4th Oct low at 1.3140 should act as a barrier ahead of Fibo level at 1.3180 should attract ahead of the congestion area at 1.3200-20.
The downside is supported – intraday – at 1.3000/20. Below here, 1.2915 and then
1.2858, the 29 Dec low should act as a base in the near term.
With the hourly charts currently being overbought, I suspect the next few hours will
see limited upside, but the longer term oscillators suggest that dips may provide
buying opportunities for further strength in coming sessions.
In short it would appear that we are in for some choppy conditions with a bias to
the upside.
FOMC minutes were just released. The Fed stated that it is likely to keep interest
rates at near-zero levels until mid-2013 and said it will start providing signals on
future rate moves in its economic forecasts for the first time in January.
Today sees German PPI and EU CPI
AUD/USD
The AUD has started 2012 strongly, as positive risk sentiment flowed into the
market following the various encouraging releases of economic data, starting
with China yesterday, followed by Europe and then the US ISM, later in the
session.
Stronger equities and commodity prices helped the Aud along its way today,
and it currently sits at resistance at 1.0378, the 8 December high. Beyond there
would target 1.0440 and then 1.0495 (76.4% of 1.0750/0.9660).
Intraday support should be seen at 1.0330 and then at 1.0270, which doesn't
look likely in the coming session. Further out, Fibo support from the move up
from 0.9660 currently comes in at 1.0260 and then at 1.0185. Once again these
are unlikely to be seen in coming sessions unless there is a major turnaround in
risk sentiment.
As with the other currencies, the oscillators are suggesting a weaker US$ in
sessions to come, and therefore we may be looking at a slightly stronger Aud. I
would not be getting too overexcited though, as it would appear that we are
just heading towards the top end of the range and it would only take one
negative headline from Europe to turn sentiment around sharply. For now
though, buying dips in the AUD looks to be the strategy to follow, keeping SL
tight, but with a view to an eventual test of the downtrend line at 1.0490 –
assuming we can break the near-term resistance at around 1.0380, and we are
giving that a test right now.
EUR/AUD continues to test lower levels making another all time low at 1.2567,
with 1.2500 the next support to watch.
