AUD/USD: 0.7640EUR/USD: 1.0575The dollar fell across the board today, on the back of some soft US data and on concerns that its recent rise has been too rapid, which could prompt the Fed to be a little more cautious about raising interest rates this year and may prompt it to keep the word "patience " in the language at Wednesday's FOMC meeting. Today's action will come, firstly in Asia from the BOJ Meeting and the RBA Minutes of their previous meeting, while later in Europe, the German ZEW and the EU CPI data will be the main focus. The US Housing Starts/Building Permits will also be released but all the interest will be in what the outcome of Wednesday's FOMC might bring us.
The Aud had a relatively quiet session, although it did spike to a session high of 0.7678 after the release of the soft US data but that was as good as it got and it has since drifted lower to sit close to where it started the session.
Today the RBA will release the Minutes of the recent meeting at which they left rates on hold, so the market will be looking for any hint as to when we might expect a rate cut, which if suggested by a dovish outlook in the Minutes, could lead to further declines in the Aud.
Technically little has changed.
The immediate points to watch, on the downside, are at the recent session lows at round 0.7610 and at 0.7600, a break of which would open up last week’s low at 0.7560 and below which would then hint at a run towards 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). Under here there is very strong support at around 0.7200 where two important Fibo levels are lining up (0.7210: 61.8% of 0.4773/1.1082 and 0.7180:76.4% of 0.6006/1.1082). I suspect that eventually 0.7000 will appear on the horizon (and eventually 0.6000!), but this is going to be some way off yet.
On the topside, the session high at 0.7678 will provide the immediate hurdle, above which the 200 HMA is at 0.7695. Beyond here we could see a return to 0.7700 and above, although this is somewhat doubtful today, I suspect. If wrong, further sellers would arrive at last week’s high at 0.7730 and then at the pivotal 100 Month MA at 0.7760 but which currently looks a long way off.
Economic data highlights will include:
RBA Minutes, China FDI
Jim LanglandsFX Charts www.fxchartsdaily.com
