AUD/USD: 0.7770EUR/USD: 1.1345The big story today was the failure of Greece and the EU to agree on any sort of common ground in renegotiating the Greek debt issue, which sent the Euro sharply lower and looking as though there could be more of the same ahead. There is a fair bit of data today, starting with the RBA Minutes and then later from Europe we get the UK CPI and the German/ZEW Survey. From the US we get the NY State Empire Mfg index and the NAHB Housing market Index. Also watch out for a speech from the SNB's Jordan which could send waves through the Chf.
In fairly quiet trade, the Aud has drifted a bit lower after earlier seeing an Asian high of 0.7793, and in thin US holiday conditions it has seen a brief low of 0.7751 before a mild bounce towards 0.7765.
Today’s action will come via the RBA Minutes, which will strike a rather dovish tone and could even see the Bank lean to an easing bias which would keep the pressure on the downside for the Aud.
If the Aud does head below 0.7750, then 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.
If the Aud decides to squeeze higher, then above 0.7770 (200 HMA) could see another advance on 0.7793 (session high) and 0.7800. Above here could see an acceleration higher towards the 10 Feb high, at 0.7841, although this currently looks some way off and unlikely to be seen today. 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).
The short term charts are fairly flat, so more choppy trade within 0.7700/0.7800 would not surprise, albeit with a mild downside bias.
Economic data highlights will include:
RBA Minutes, China House Price Index, Foreign Direct Investment.
Jim LanglandsFX Charts www.fxchartsdaily.com
