AUD/USD: 0.7900
EUR/USD: 1.1290
The FOMC announcement probably had a bit for everyone, without actually saying anything to change the overall outlook. While quietly confident about the direction for the US economy, the Fed also noted that inflation remains sub target as well as acknowledging the challenges in the global economic cycle. After a choppy session, the dollar bulls are taking charge and seem to be aggressively buying it again, particularly against the Euro, at the time of writing. Today sees a fair bit of secondary data from the EU and US in what looks likely to be a choppy session, although much of the session will be spent digesting the Fed’s statement.
The Aud headed to a high of 0.8024 as follow-through buying in Europe, on the back of the better than expected trimmed mean CPI figure before heading lower again in choppy trade ahead of the FOMC. The announcement caused some minor volatility as the Algos got busy but the Aud has stabilised, for the time being at around 0.7960. and with little data due today, a session of chopping around between 0.7900/0.8000 could be in store, although the mild bias remains for another test of the downside.
The indicators are mixed, with the hourlies looking flat/negative, while the 4 hourlies still point higher, suggesting the Aud may be underpinned today by any dips towards 0.7900, although a break would take us back towards the trend low at 0.7857.
Points to watch on the downside, below 0.7900 are at 0.7880 and at the trend low at 0.7857, where the base of the descending channel is providing some support. Under 0.7850, would head towards 0.7800 and then to 0.7765 (200 Month MA), 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 above 0.7975 (minor) will again find sellers at 0.8000 (38.2% of 0.8230/0.7857), and at the session high at 0.8024. Above here (doubtful) would see a run towards 0.8050 (50% pivot of 0.8230/0.7857) and then to 0.8085 (61.8%), although I don’t see it happening today.
Look for 0.7860/0.7960 to cover it
Economic data highlights will include:
Import/Export Price Index.
Jim Langlands
FX Charts
www.fxchartsdaily.com
