AUD/USD: 0.7825EUR/USD: 1.1400The US$ was mixed heading into the FOMC minutes, slightly stronger against most of its counterparts, except for Cable, which was boosted by solid employment numbers and the outcome of the BOE Minutes. That all changed after the release of the FOMC Minutes, and with the Fed taking a mildly dovish stance, the dollar has since weakened across the board. All up, it looks like we are in for a continuation of the recent choppy trade, going nowhere fast unless there is any definitive news one way with regards to Greece. Overall, in the absence of any major data, it looks like being a session largely of further consolidation near current levels. Highlights will be the EU Current Account, and Consumer Confidence and then later the US Jobless Claims, Philly Fed Mfg Survey. Asia gets the Japan current account &NZ PPI, but with the Chinese NY in full swing it should be quiet.
Having reached 0.7830 in Asia, with the Japan Post-Australia Toll Holdings merger underpinning the Aud, it then drifted steadily lower through the Europe/US sessions, sitting at the lows of the day at 0.7775 ahead of the FOMC minutes. This turned round abruptly after the dovish Fed release and saw a spike back to new session high at 0.7837, before finishing the US session at 0.7820.
It would be of little surprise if, in the absence of China for the New Year celebrations or any local data, to see the Aud continue to sit around here, underpinned by shorts looking to trim their positions, but with sellers also lining up in the 0.7830/50 area.
The soft tone of the US$ does look as though it could continue, in which case, if the offers can be taken out, then 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).
Back below 0.7800 will find bids at the session low (0.7773) and then at 0.7760, although I would be surprised to see it down here today. If wrong then Tuesday’s brief low at 0.7740 would come into view, below which 0.7720/25 will be the next support ahead of 0.7700. Under there would find minor support at 0.7665/70 and then at last Thursday’s session low of 0.7643.
Look for a 0.7790/0.7850 type day.
Economic data highlights will include:
China NY.
Jim LanglandsFX Charts www.fxchartsdaily.com
