AUD/USD: 0.7770EUR/USD: 1.1585Equities closed on a strong note, with the S+P at an all time high, while the currencies mostly chopped around without going anywhere too far in either direction. A mix of data this week will focus on the FOMC Minutes (Wed) and the global flash PMI's (Fri), with the German/EU ZEW Economic Sentiment Survey being the main event likely to drive any direction today. Headlines on the possibility (or not) of Greece extending talks at today's Eurogroup meeting may add to the wait and see mind-set of the market - and with the US out for the partial Presidents Day holiday, it could be a largely rangebound affair to start the week. Chinese New Year will add to the tin liquidity in Asia this/next week.
The Aud had a choppy session on Friday, in heading up to 0.7791 before reversing to a low of 0.7724 in Europe and then finishing the week in the middle of that range.
Given the partial US holiday today and the Chinese New Year celebrations, starting on Wednesday - and going on through to the end of next week, - the action may be somewhat limited over the next few sessions and we may be in for another rather directionless session today. The highlight of the week will be the RBA Minutes, tomorrow, which are likely to have a dovish bias and could see weakness re-emerge in the Aud.
Given that the Aud closed the week not too far removed from Thursday’s levels, there is not too much change from a technical perspective. The 4 hour and daily charts still have a positive bias and if Friday’s 0.7791 high can be overcome, then a more serious test of 0.7800 and above would come into view, where the 10 Feb high, at 0.7841, would be the first target although this currently looks some way off. If wrong, above 0.7850 would head towards the 6 Feb top at 0.7876, which should be strong resistance. 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).
On the downside, 0.7720/25 will be the first support ahead of 0.7700. Back below 0.7700 would find minor support at 0.7665/70 and then at Thursday's session low of 0.7643. A break of this will head back towards the trend low at 0.7625 (3 Feb), 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.
Economic data highlights will include:
M: New Vehicle Sales
T: RBA Minutes, China House Price Index, Foreign Direct Investment
W: CB Leading Indicator, WBC Leading Index, Chinese NY
T: China NY
F: China NY.
Jim LanglandsFX Charts www.fxchartsdaily.com
