AUD/USD: 0.7675EUR/USD: 1.0680The ECB left policy unchanged, as expected, with Mario Draghi sounding mildly upbeat at the Press Conference, but saying nothing that we did not already know aside from a solid commitment to the QE programme until Sept 2016 - which the equity and bond markets liked. Elsewhere, more soft US data, putting any imminent Fed rate hike in doubt, has seen the dollar head lower on all fronts while at the same time boosting commodity prices, where WTI in particular, had a strong session. Today will kick off with the NZ Business PMI, the Australian Jobs data and the China FDI, after which it will be a bit thin until the US session when the Housing Starts, Jobless Claims, Building Permits, Philadelphia Fed Mfg Survey are all due.
After a choppy session of trade either side of 0.7600 going into Europe, the Aud shot higher today after the release of the soft US data. It was assisted by firmer commodity prices, squeezing the shorts in reaching 0.7700, before drifting slightly lower into the end of the NY session.
The focus today will be on the jobs data (exp +15.6K, 6.3% and PR of 64.6%). A weak number will see the Aud fall back towards the RBA’s stated target of 0.7500 as thoughts of a May RBA rate cut come to the fore, while a firmer reading will place 0.7700 under severe pressure, above which would see a run towards daily cloud base at 0.7720 and to the 9 Apr high at 0.7737, where the daily Kijun will provide resistance. Above here would head towards 0.7760 and then on to 0.7800.
The downside is going to find support today at 0.7645/50 and then at 0.7630 (100HMA) below which would head back to 0.7600. If the jobs data comes in at close to expectations, the Aud is unlikely to head under here in the near term, but if the number is weak we could then get a move back to 0.7570 and 0.7550 which has proved to be strong support recently.
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.
Economic data highlights will include:
New Vehicle Sales, Unemployment, China FDI.
Jim LanglandsFX Charts www.fxchartsdaily.com
