AUD/USD: 0.7750EUR/USD: 1.0890Friday ended up being choppy but with little direction coming from either the below par US GDP reading or from what Janet Yellen had to say, which was really nothing that awe did not already know. Rates will probably rise later on this year; maybe, depending on the data. That was about it from her, although there will be plenty more Fed-speak this week with someone due to talk on most days ahead of the US Jobs data and Non Farm Payrolls that will arrive on Good Friday. I would be pretty square well before then! Elsewhere this week, there is a fair bit of secondary data due ahead of Easter, starting today with the EU Consumer Confidence, German Provisional CPI, US Personal Consumption/Expenditure and Pending Home Sales. UK Consumer Confidence is also due.
The Aud has traded in heavy mostly fashion since last week’s spike up to 0.7937, and Friday was no different in closing just above the session lows of 0.7744.
Given the negative look of the short term indicators further losses seem possible, in which case we are headed towards the base of the minor descending channel at around 0.7730, which ties in with the Fibo support at that level (0.7735: 61.8% of 0.7559/0.7937). A break of this would see a deeper decline towards 0.7700 and lower, towards 0.7687 (76.4%). Beyond here would then open the way towards 0.7662 (20 Mar low) and beyond, towards the rising trend support at 0.7640 and to the strong support in the 0.7600/10 area.
The dailies though, still retain a positive outlook, so don’t get too carried away yet on the downside. Rallies will find resistance at the 200 HMA at 0.7770, which ties in pretty much with the 100 Month MA that continues to act as a magnate, as it has done over recent weeks. Above here would take another look at 0.7800 and then at the 100 HMA at 0.7845, although this seems out of reach today.
Note that in Ichimoku land, the Aud made a valiant effort to break above the weekly Tenkan at 0.7795 by heading sharply higher last week, before closing back below it on Friday. We have not had a close above the Tenkan since August too 2014. The daily Tenkan is at 0.7765, and having closed below that, this will also act as interim resistance.
Look to sell rallies towards 0.7800 with a SL placed above 0.7850 as we head back towards 0.7700 and lower over the next few sessions.
Economic data highlights will include:
M:
T: ANZ Business Confidence, HIA New Home Sales, Private Sector Credit
W: AIG Manufacturing PMI, Official/HSBC China Manufacturing PMI’s
T: TD Inflation, Trade Balance
F: Good Friday.
Jim LanglandsFX Charts www.fxchartsdaily.com
