AUD/USD: 0.7625EUR/USD: 1.0650Soft US Retail Sales data and an IMF downgrade in the US 2015/16 growth outlook, while at the same time upgrading the outlook for the EU, Japan and UK did not help the dollar today, and it is weaker on all fronts. Today will be busy, kicking off with some major China data – headed by the GDP – and then followed up in Europe by the ECB Meeting, Mario Draghi’s Press Conference and plenty of secondary data from both the EU and the US. The Bank of Canada will also be meeting, where rates are expected to stay on hold. Aside from the China data, Fed member Kotcherlokata will be speaking in the Asian time zone, which will also feature the Australian Consumer Confidence.
Support at 0.7550 held once more today and provided the platform a strong bounce to 0.7648, seen after the US Retail Sales failed to meet expectations, and currently sits at 0.7625 where it is likely to remain until the Consumer Confidence data and more likely until the China GDP (exp 7% yy).
Technically the Aud is sitting pretty much in the middle of the recent 0.7737/0.7552 range and it could be that this continues to provide the parameters for the next few days. A GDP reading of below 7% today would return to the downside, where, below 0.7600, decent support lies at 0.7575 and 0.7550. Below there, which looks a little unlikely today, would see a retest of 0.7532 (2 April low). Below this, the RBA’s line in the sand at 0.7500 will provide stronger support but a break of which would open up the way to 0.7414 (Oct 2010 low). Beneath this there is a bit of a black hole until the 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 even 0.6000!), but this is going to be some way off yet.
On the topside, the 100/200 HMA’s are crossing at the day’s high at 0.7648 and should see decent sellers. Beyond 0.7650 would see a squeeze towards the Fibo resistance at 0.7665 (61.8% of 0.7737/0.7552) and possibly towards 0.7700. I don’t think we head above here today but if wrong, the recent high at 0.7737 would be the next port of call.
While the China data will be today’s focus, traders will also be looking forward to tomorrows important local Jobs data (ecp 6.3%, +15k, PR 64.6%) and the implications for a possible May RBA rate cut – or not.
Economic data highlights will include:
WBC Consumer Confidence, China Retail Sales, Industrial Production, GDP NBC China Press Conference.
Jim LanglandsFX Charts www.fxchartsdaily.com
