The US dollar was under some pressure early in the day but turned itself around after the improved US Housing data. US$Chf and Cable were the star performers, with the Chf under pressure after the SNB moved to widen the application of SNB rules on negative IR, while Cable surged on the more hawkish BOE Minutes. There is plenty of secondary data due today, headed by the flash PMI’s, but it may be another choppy session, driven by event risk, ahead of tomorrow’s Eurogroup meeting, where Greece will be the centre of attention. Before then, Asia will look to the HSBC flash China Mfg PMI for direction, while Australia gets the NAB Business Confidence Conditions.
A market caught short of Aud was squeezed up to a high of 0.7806 after yesterday’s slightly firmer than expected CPI, although it has faded from there since then to currently sit at 0.7760.
Today will be the turn of the NAB Business Conditions/Confidence (prev 2) and HSBC flash China PMI (prev 49.6) to provide the action.
Unless the data surprises one way or the other, we could well be confined to the 0.7700/0.7800 range ahead of the Eurogroup Meeting tomorrow, which will also see the US Durable Goods. RBA Governor Stevens will be talking at the AFR Banking Wealth Summit on 28 April and could take another swipe at the Aud.
Technically there is little change in the overall picture.
Currently sitting on the 100 HMA, the topside will find sellers at the descending trend resistance, now at 0.7800. A break of this, and the session high at 0.7806, would then progress towards Friday’s high of 0.7842, above which would suggest a run towards 0.7884 (26 March high), 0.7904 (25 March high) and to the trend high at 0.7937.
The downside will see bids at 0.7745 (minor) and then at the 200 HMA at 0.7700.
Further out, below 0.7700 would head to the week’s low at 0.7682, ahead of the minor Fibo supports at 0.7665 and 0.7620. If/when we ever head back below 0.7600, decent support would lie at 0.7575, 0.7550 and at the trend low 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:
NAB Business Conditions/Confidence, HSBC China Manufacturing PMI (Flash).
Jim LanglandsFX Charts www.fxchartsdaily.com
