A soft than expected German IFO coupled with ongoing Greek concerns pushed the Euro lower today, although the US had some soft housing data of its own which interrupted the dollar's rise and saw the other major's recover some of their earlier losses. Focus now turns to Janet Yellen's testimony to Congress, later in the coming session, although there is plenty else besides to provide some interest. From the EU we get the German GDP (Q4), EU CPI (Jan), and the BOE Governor will be testifying to the UK Parliament, while Mario Draghi will also be speaking. From the US, aside from Janet Yellen, the US Consumer Confidence data will be released. It is going to be a busy session.
The Aud had had enough of trying to break up through 0.7850 by the time Europe got in and turned lower, accelerating on a break of 0.7810 and headed quickly to the 200 HMA at 0.7780 which has so far held, although bounces have been rather muted. The rally has been capped, so far, by the 100 HMA at 0.7810 and thus the short term range could be set for the coming session in the absence of any local data or any interest from China, still out for the New Year celebrations. The next action looks to arrive from Janet Yellen’s testimony and until then it could be rather quiet.
If wrong, below 0.7780 would see a run towards last Thursday’s low at 0.7756, below which could head back to Tuesday’s brief low, at 0.7740, seen immediately after the release of the RBA Minutes. Below there, 0.7720/25 will be the next support ahead of 0.7700, a break of which would then head to minor support at 0.7665/70 and possibly on to last Thursday’s session low of 0.7643.
On the topside, above 0.7810, there seems to be plenty of interest to sell the Aud at 0.7835/45 area and I would be rather doubtful of seeing this today. If wrong, look for a more sustained test of 0.7850, beyond which will want to take a look at the 6 Feb top at 0.7876, which should be strong resistance. Above here could see 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 here could then see a run back towards the Fibo resistance at 0.7995 (61.8% of 0.8230/0.7625) for a more sustained look at 0.8000, above which would trigger a serious amount of stops.
Economic data highlights will include:
Chinese NY.
Jim LanglandsFX Charts www.fxchartsdaily.com
