AUD/USD: 0.7700EUR/USD: 1.0625The dollar had a change of fortune today as profit taking set in ahead of the weekend, with some very soft US Retail Sales data not helping its cause as the market turns its focus towards next week’s FOMC meeting. It could be that we are in for more of the same today although there is a general lack of data to drive the price action and it will be positioning flows that drive the direction. The NZ PMI is coming up and there is some secondary Japanese data due, but that apart, there is little to go on apart from the US PPI later in the day. Have a good weekend.
After making a new trend low at 0.7559, the Aud has seen a decent bounce on the back of today's broad based US$ weakness and has since seen a high of 0.7730, before a retreat to levels back close to 0.7700.
With no data today it could be a quieter affair, although the short term charts do suggest the chance of another squeeze to the topside. If so, then above 0.7730 (200 HMA) would hint at a move towards 0.7760 (minor) and possibly to downtrend resistances at 0.7790 and then again at 0.7815. Above here would see a bigger squeeze towards Fibo resistance at 0.7870 (23.6% of 0.8910/0.7559) although that may be a stretch to far in coming days and would be where i would be again looking to sell into the strength.
Back to the downside, the 100 HMA is at 0.7655, below which would see a return towards 0.7625 and then to 0.7600. I doubt that we are heading down here today, but if wrong, bids would arrive at 0.7580 and again at 0.7560. A break of the trend low at 0.7559 would then hint at a run to the RBA’s stated target of 0.7500. I think we are eventually heading there and lower, over time, below which there is not too much to hold the Aud ahead of 0.7414 (Oct 2010 low).I suspect that eventually 0.7000 will appear on the horizon, but this is going to be some way off yet.
Look for a choppy session with a mild upside bias.
Jim LanglandsFX Charts www.fxchartsdaily.com
