EUR/USD
The Euro finally did the right thing and rallied up through the top end of the channel and in doing so, has had enough momentum to carry it on through the resistance at 1.3240, seeing a high so far of 1.3269. The move came about, care of increased hope of a Greek deal and also due to Bernanke and his very dovish view of the US economy and employment in particular, which saw the US$ weaken against most currencies. The Euro has lost some of the gains from its highs as the meeting between Greek leaders on the bailout package has been delayed by 24 hours while a general strike in Greece against the proposed austerity measures has shut down most services and has seen some violence. So once again we wait for an outcome in the never-ending saga, although with the meeting due to now take place later today, we might see some resolution. Merkel and Sarkozy have both let Greece know exactly where they stand if they are unable to reach an agreement, so while the Euro is higher today, it might be a brief visit to the higher ground!
Looking at the charts for some guidance, the 4 hour indicators are showing that we can expect further strength, with the next target being around 1.3350, and with interim hurdles at 1.3270, 1.3300 and 1.3335 along the way. The next major Fibo resistance is not to be seen until 1.3438 (50% of 1.4243/1.2623).
The downside has seen the market hold onto the gains above 1.3240, so this is likely to act as a bit of a base in Asia. Should we go below it though, the previous channel top at 1.3190 and then Fibo support at 1.3115(23.6% of 1.2623/1.3167).
It looks like we are in for a decent move ahead of us, the direction of it being entirely reliant on the outcome of the Greek deal. The worry then will be that even if it is a positive conclusion, there is plenty of opposition on the street against the proposed austerity measures and we have a Greek election due in April.
Little of economic importance today, so sit and watch Greece unfold!
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EUR/USD: 4 hour
AUD/USD
he RBA decision to leave rates unchanged yesterday certainly put the wind behind the sails of the Aud, with an immediate spike to 1.0810, and a new low in Eur/Aud at 1.2150, immediately after the announcement. The cross later dropped to 1.2132, before some impressive short covering which has seen the cross recover to 1.2280 as the Aud lagged while the Euro gained ground on the Greek news.
As far as the Aud/Usd is concerned, most of the action took place straight after the number, with the spike higher. It has continued to be bid but remains nicely within the channel, where the top is currently placed at around 1.0840, having seen a European session high of 1.0821.
The hourly charts are unwinding from their overbought status and I would be surprised if we were to take out the overnight high in the coming session. Look for 1.0750/1.0820 to cover it in Asia. In Europe much will depend on the outcome of the stalemate in Greece. If they reach a deal the Aud will go up and if they don’t it won’t. The meeting between the Greek leaders has been put off (again!) until Wednesday so in the meantime, with not much in economic terms (WBC Consumer Confidence – today) I would imagine we are in for a consolidative session.
Further out, if 1.0840 does get taken out the next resistance is at 1.0890 and then at 1.0910, ahead of congestion in the 1.09/1.10 area. The downside, below 1.0750 still sees 1.0700 trend line support and the 1.0685 pivot. There should be good bids here should we see this level, but below here reverts towards 1.0530
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AUD/USD: 4 hour
