AUD/USD: 0.7940EUR/USD: 1.1180The market took the dollar lower today, ignoring the firm ISM Non manufacturing figure and concentrating instead on the wider than expected US trade deficit. All the major currencies are firmer today, including the Aud, which had a wild ride after the RBA cut rates and has left Glen Stevens wondering what he needs to do to get the currency lower! Today will be another busy one for the Aud, with the release of the New Home Sales, Retail Sales and the HSBC China Services PMI. Before that the Q1 NZ Employment data is due shortly. Later in the day, the Europe will get to see the ECB Non Monetary Policy Meeting, EU Services/Composite PMI’s, EU Retail Sales and the UK Services PMI, while from the US, comes the ADP Employment data, ahead of the weeks key focus on the NFP.
Not sure where to start with the Aud! The RBA did as expected in cutting rates duly sending the Aud down to 0.7785 before an explosive rally to 0.7917 and then settling around 0.7885 into Europe. Since then it has found new legs after the mixed US data to send it on to 0.7954 and is closing not so far from the highs. The RBA must be wondering what they can do to get the Aud lower. Today’s Retail Sales may come to help, if lower than the 0.4% expectations, as could the China Services PMI (exp 53.1), although it seems destined to hang on above 0.7850 today, still higher than yesterday’s levels, seen pre the rate cut.
The market got pretty much blown away on both sides yesterday and thus a quieter session may be in store to day. For the time being, 0.7955 will provide the resistance, above which would head to 0.7975 and then to 0.8000. Above here, there would be good resistance at 0.8025, a break of which would head to last week’s 0.8074 high.
The downside will see bids at 0.7900 a break of which would head back to 0.7885, where the 100/200 HMA’s are crossing. Below there 0.7850 and 0.7830 will see bids ahead of 0.7800 and yesterday’s spike low of 0.7785.
Expect it to be pretty choppy over the next few days. I still think selling into rallies is the way to go, but it’s been a pretty painful ride so far, and not overly confident.
Economic data highlights will include:
HIA New Home Sales, Retail Sales, HSBC China Services PMI.
Jim LanglandsFX Charts www.fxchartsdaily.com
