AUD/USD: 0.7810EUR/USD: 1.1325It was generally a choppy session with some Yen strength being a main theme on the back of ongoing concerns over the situation in both Greece and the Ukraine. Elsewhere it was choppy, although both the Aud and Kiwi recovered from their gap lower open following the soft weekend Chinese trade data. The Aud will be in focus again today with the release of the House Price Index and the NAB Business Confidence/Conditions, while from China we get the CPI, PPI. Later on the UK gets the Industrial/Manufacturing Production and NIESR GDP Estimate, while from the US, the Wholesale Inventories will be the focus. That’s about it. Another choppy day, governed by politics appears to be in store
After opening on its lows following the negative weekend Chinese trade data, the Aud has recovered well, with shorts being squeezed, and has managed to reach a high in NY of 0.7833, not too far from current levels.
Today’s Chinese CPI will be closely watched (exp 0.4%mm, 1.0%yy), while the local focus will be on the Q4 house prices and the NAB business conditions & confidence indictors. Should the housing data come in above expectations the Aud might get a further boost as the RBA have widely documented their concerns on house prices.
If the squeeze higher does continue the points to watch are immediately ahead, at the session high (0.7833), which ties in with the minor downtrend resistance (chart, below), above which would take the Aud back to 0.7850 and then to Fridays top at 0.7877. Above here, we could be in for a run towards 0.7895 (23.6% of 0.8794/0.7625) and then to the 50% pivot of 0.8230/0.7625 at 0.7925, above which could then see a run back towards the Fibo resistance at 0.7995 (61.8% of 0.8230/0.7625).
A return to the downside will see minor bids at 0.7790/95, where the 100/200 HMA’s are crossing, below which would find buyers at the session lows at around 0.7750 and then at 0.0.7720/30. Below here would suggest a move back below 0.7700 and possibly towards the trend lows at around 0.7625, although this will take some time.
Further out, on am eventual break of the current trend lows, we are looking at the RBA’s stated target at 0.7500, beneath which there is little real support for the Aud until the next major Fibo supports to be seen on the monthly chart (below) at 0.7204 and then at 0.7183 (76.4% of 0.6006/1.1082 and 61.8% of 0.4773/1.1082). If/when seen, this area should be extremely strong support.
For today, use 0.7780/ 0.7860 as a rough guide, but with direction to be dictated by the data
Economic data highlights will include:
House Price Index, NAB Business Confidence, Conditions, China CPI, PPI
Jim LanglandsFX Charts www.fxchartsdaily.com
