AUD/USD: 0.8175
EUR/USD: 1.1550
General dollar strength has again been the theme of the day, with both the Yen and the Euro under pressure ahead of respective central bank meetings (BOJ today / ECB tomorrow). Aud and Kiwi are both also lower despite yesterday’s solid China data, with today’s direction to come via Consumer Confidence (Aud) and CPI (Nzd) data. Gold was again a winner, so far falling just shy of 1300oz, while WTI fell sharply. Elsewhere today, the BOE Minutes and US housing data will be the main focus
The Aud chopped around close to 0.8200 at the time of the China data yesterday but the mildly better than expected 7.3% yy reading of the GDP failed to ignite any fresh buying and saw the it drift away to 0.8160, which proved to be the session low. Since then, the price action has chopped around the 0.8160/0.8210 area, but is finishing the US session nearer the lows and with the 4 hour charts looking heavy, a more sustained test of 0.8150 may be on the cards.
Back below 0.8150, and the 15 Jan low at 0.8132, further bids will arrive at 0.8100, where it appears that the Aud is trading in a short term rising channel, with 0.8100 currently being the base. A break of 0.8100 would head to the previous lows at 0.8067 and then to the recent trend low of 0.8032 (7 Jan). Below here, albeit probably not today, the downside momentum would 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), below which we then are headed to the July 2009 low at 0.7700 and beyond, possibly to the RBA’s stated target at 0.7500, albeit not for a while.
On the topside, 0.8200/15 has proved tricky over the last session or two and may well prove to be so again today. A break higher though would target Friday’s high of 0.8255 ahead of the recent minor highs at 0.8273 and 0.8298, with the next Fibo resistance not seen until 0.8321 (38.2% of 0.8795/0.8033). Beyond this, the breakout level from below the base of the long term channel is seen at 0.8350 and should be strong resistance – and a decent sell opportunity – if seen.
For today, use 0.8130/0.8210 as a guide. The WBC Consumer Confidence will be the only local data and it looks as though the Aud is going to have a session driven mostly by the crosses, given the relative lack of data today to give the US $ any direction either. Keep an eye on Aud/Jpy in case of a surprise from the BOJ.
Economic data highlights will include:
WBC Consumer Confidence.
Jim Langlands
FX Charts
www.fxchartsdaily.com
