AUD/USD: 1.1840
EUR/USD: 0.8200
While Friday’s US Jobs data was solid, the lower than average weekly earnings took the steam out of the dollar, which finished generally lower against the other majors, not helped by weaker equities and bond yields. This week has a mix of data which will cause some volatility but the focus will turn increasingly towards next Thursday’s ECB Meeting and then to the Jan 25 Greek election. Today offers little guidance, and with a Japanese holiday it could be a quiet Asian session in particular. The highlights of the day will be focused on the Aud, with the release of the ANZ job ads and home loan data. Otherwise it will be down to follow-through flows, following Friday’s NFP, with nothing due from either the EU or the US.
The Aud saw some choppy action after Friday’s NFP release, but ultimately headed higher as the market looked at the lower hourly earnings in the US which sent bond yields and the US$ lower. Widening yield spreads came to the assistance of the Aud, which finished up just shy of the Fibo resistance at 0.8211 (23.6% of 0.8795/0.8033) after seeing a high of 0.8207.
This week sees a mix of data but the main focus will be Thursday’s unemployment where expectations are for a headline of 6.3% (+4K, PP: 64.7)
With the 4 hour and daily charts both looking positive it could be that we are in for further gains in the days ahead, and above 0.8210/15 would suggest an acceleration towards recent minor highs at 0.8234, 0.8273 and 0.8298, with the next Fibo resistance not seen until 0. 8321 (38.2% of 0.8795/0.8033).
The downside looks reasonably well underpinned for now, with minor Fibo supports to be found at 0.8165 and then at 0.8140. I don’t really see us heading below here today, although if wrong, the next target would be at the 200 HMA at 0.8125 and the 100 HMA at 0.8110. This area should now be strong support as we have broken back above the daily Tenkan at 0.8120 for the first time since November and may want to progress higher for a look at the Kijun, currently at 0.8247 (chart below)
While the longer term US$ uptrend remains valid, it does look as though we may be in for a period of consolidation above 0.0800/30 before it can resume. If and when the Aud return does to 0.8100 and below, the recent low of 0.8032, further downside momentum would then look to carry the Aud beneath 0.8000 and on towards the important Fibo level at 0.7944 (61.8% of 0.6006/1.1080), which should hold it at least that the first attempt. If wrong, then we are headed to the July 2009 low at 0.7700 and then possibly to the RBA’s stated target at 0.7500. This is all rather looking to be on hold for the time being.
Economic data highlights will include:
M: ANZ Job Ads, Home Loans, Investment for Home Loans
T: China New Loans, Trade Balance
W:
T: Unemployment
F: China FDI.
Jim Langlands
FX Charts
www.fxchartsdaily.com
