AUD/USD: 0.7820EUR/USD: 1.1415The dollar is mixed today, slightly weaker against most of its counterparts but stronger against both the Yen and Cable. It could be a busy session ahead, starting with the BOJ Meeting and then followed up later on by the BOE and the FOMC Minutes. There is a mix of US data as well (US Building Permits, Housing Starts, PPI, Capacity Utilisation, Industrial Production) which could all add up to give the dollar its next directional move. The Chinese NY celebrations begin today so liquidity/ interest may be somewhat diminished during the Asian session.
The Aud has squeezed higher after the slightly less dovish than expected RBA Minutes cut out some stale shorts. The odds of a March RBA rate cut weakened to about even money and the Aud now sits back above 07800 after some rather choppy trade and appears to have the chance of pushing on towards 0.7830 and possibly higher, although in the absence of any major data today, and with the Chinese NY also about to get under way, it could be a fairly quiet session.
If we can take out the session high (0.7828), then the Aud can advance on to the 10 Feb high at 0.7841, a break of which would retest 0.7850, beyond which would then 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).
Back below 0.7800 will find bids at 0.7780 and at 0.7760, although I would be surprised to see yesterday’s brief low at 0.7740 again today. If wrong, 0.7720/25 will be the next support ahead of 0.7700, beneath which would find minor support at 0.7665/70 and then at last Thursday’s session low of 0.7643.
Further out, a break of 0.7640 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:
CB Leading Indicator, WBC Leading Index, Chinese NY
Jim LanglandsFX Charts www.fxchartsdaily.com
