AUD/USD: 0.7740
EUR/USD: 1.1400
It has been a pretty busy day for all currencies today, Weaker US data has undermined the dollar on all fronts, while the Euro gained some support from the Russia/Ukraine ceasefire. Cable benefited from the hawkish QIR while the Yen gained solid ground on the back of a statement attributed to the BOJ. Even the Aud and the Kiwi recovered all the losses seen after yesterday’s Australian jobs data! Today’s focus will be on the EU GDP figures and then later, from the US, we get the Rts/Michigan Consumer Sentiment Index. In Australia, RBA governor, Glenn Stevens will be testifying to the House of Reps. Have a good w/e.
After getting slapped lower following yesterday’s unemployment figure, the Aud has managed a decent recovery on the back of today’s soft US data, in spiking up to a high of 0.7778 before settling at the end of the session at around 0.7740. It has not been a bad effort for the Aud really, given that most analysts are now suggesting a March RBA rate cut, which would undoubtedly take the Aud lower.
Today’s focus will again be on the RBA, when the Governor, Glen Stevens, testifies to the House of Representatives’ Standing Committee on Economics. He is likely to strike a dovish tone and could well lament the current, elevated level of the Aud in an attempt to talk it lower, which would then most likely see a return to levels below 0.7700. If he does not mention the currency in his outlook, then a decent short squeeze may take hold that would take us back to 0.7800 and above.
Given where the Aud currently sits, the points to watch remain rather similar to yesterday. Back below 0.7700 would find minor support at 0.7665/70 and then at the session low of 0.7643. A break of this will head back towards the trend low at 0.7625, below which could see the Aud on its way to lower levels, initially supported at 0.7600, but below which, we are looking at the RBA’s stated target at 0.7500. Under there, 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.
On the topside, which the indicators are now generally pointing to, then above the 0.7778 session high would head back to 0.7800 and then possibly towards yesterday’s session high at 0.7841 although this currently looks some way off. If wrong, above 0.7850 would head towards Friday’s 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 Friday close above the daily Tenkan (0.7750) would be a positive for the Aud for further corrective gains early next week.
Economic data highlights will include:
RBA Governor Stevens testifies @ H of R.
Jim Langlands
FX Charts
www.fxchartsdaily.com
