Today has been the quietest in a long while, with the Euro stuck in a 50 point, 24 hour range, so there is not a lot to report. The only real action was when Euro squeezed higher in early Europe to 1.3265 prior to the release of the German and EU PMI data. The release of those figures quickly put an end to the rally as the EU flash composite figure read as 49.7 against an expected 50.6, while the German reading was 50.1 against the predicted 51.5. The Euro was put quickly back in its place, with a swift move down to 1.3215 and that more or less covered the range for the day. It was an almost Greece free session, with Portugal seizing the headlines, as rumours did the rounds that it may need to restructure its debts. 10 Year yields climbed to 12.66% at one stage. Don’t worry though, Greece is never far away and will soon be back as a headline act as the election approaches, and the scepticism surrounding the likely success of Mondays deal is already increasing. (The Dax closed down 1%). Fitch has already come out fighting, saying that Greece will default and has downgraded Greece to C in order to prove its point.

So technically there is no change. Sellers sit at 1.3300 and above, while buyers are at 1.3160/70.  In the more medium term, price action continues to squeeze into an increasingly narrow range, which looks likely to be the prelude to a breakout and something more directional. It could be that we are forming a reverse Head/Shoulder bottom, with the neckline drawn (white – 1.3370) and if correct would give us an objective of up at around 1.4000. If this were to be the scenario though, it needs to happen more or less immediately as the formation is more or less ready to go. Otherwise we may play out some further range trading within the 1.3030/1.3370 parameters between the 2 white lines.

As far as today is concerned, 1.3215/1.3275 provides the immediate guidelines and beyond there 1.3180/1.3290 should easily contain until Europe  get in, barring any surprises.

Economic data today includes the German IFO and then the US Jobless Claims. It looks like being a quiet one.

Most of the action took place in Asia yesterday and the Aud dropped to 1.0610, landing right on the corrective channel support before rebounding on the China PMI data to 1.0685. It fell again and retested the lows before rebounding to current levels.

So, in the bigger picture, little has really changed for the Aud as the 1.0600/1.0800 range still largely covers it. If we see a break below 1.0610, expect bids now to emerge at 1.0570 (23.6% of 0.9660/10844). Below there, 1.0500 provides back up support but is unlikely to be seen today. To the topside 1.0700 continues to act as interim resistance, ahead of the top of the channel at 1.0800.

Today it looks as though it could be a quiet one. The bids are pretty solid in the 1.600/10 area and should hold, although the 4 hour charts are showing mildly lower bias. The dailies are more bearish, so although we might see a return to 1.0700, the pressure looks to remain lower over time.