The dollar made an attempt to recover today, after the better than expected jobless claims, and made some reasonable gains against most counter-parties, barring the Euro which remains extremely strong. The Aud (rate cut speculation/ lower iron ore price) and Cable (election jitters) in particular had a tough session. Asia, today, will get the Chinese manufacturing/non-manufacturing PMIs and the Japan CPI. It is the May Day holiday for much of Europe, and so should be pretty quiet until the US session when the ISM Manufacturing data and the R/M Consumer Confidence figures are due.
Several factors combined to send the Aud lower over the session, not the least of which were the strong rally in EurAud, the 4.5% fall in the Iron Ore price and an article in the SMH indicating that the RBA will cut rates next week.
After opening the day above 0.8000, it has since travelled down to 0.7863 before settling near 0.7900. Direction today will be directed by the local Manufacturing PMI and from the China Official Mfg/Non-Mfg PMI’s, and then later in the day, by the US Mfg data.
It could be quite a choppy session, in rather thin conditions given the May Day holiday and the charts do look rather mixed. The 4 hour charts remain negative, although the dailies still look strong, and if the US data is weak later in the day, then the Aud could well regain some or all of yesterday’s losses.
On the topside, sellers will arrive at the 100 HMA (0.7925) and then at 0.7950. Above this would see a return to test 0.8000 and possibly to 0.8025 and 0.8070 although this does seem too far off to worry about at present.
The downside will find bids at the 0.7863 low and then at the 200 HMA at 0.7840. Below here will then head towards 0.7815 (50% of 0.7552/0.8074) and to 0.7755 (61.8%), but probably not today.
Economic data highlights will include:
AIG Manufacturing PMI, PPI, China Official Mfg/Non Mfg PMIs
Jim LanglandsFX Charts www.fxchartsdaily.com
