It has been a choppy session, with the US$ generally weaker, but with the currency markets somewhat sidelined while the focus remains on the bond markets, where yields have generally surged higher over the last few sessions. Today will be a busy session, beginning with a host of Chinese data, headlined by the Retail Sales and Industrial Production. Later on, German CPI and the EU provisional GDP figures will be the focus for the EU, while the UK gets the unemployment numbers, and later in the day, the Quarterly Inflation Report from the BOE. From the US comes the Retail Sales and Business Inventories. Finally, the ECB will release its Monetary Policy Meeting Accounts. The Kiwi is currently busy after the FSR release and ahead of RBNZ Governor speaking to parliament.
The Aud took a bid tone in Asia yesterday following the release of the investor property finance data which surged higher, reflecting the Feb rate cut, and after bottoming at 0.7885 it then headed higher into Europe, eventually reaching a session high of 0.7999 and currently sits a little lower at 0.7980.
Today’s focus will be on the Chinese data, headed by the Retail Sales (exp +10.5% yy), but which will also include the Industrial Production, New Loans and Urban Investment. Locally there is only the Wage Price Index to provide any interest.
Direction will depend on the data but the points to watch will be, on the topside, initially, at 0.8000. A move back above 0.8000 would head back towards last week’s 0.8030 high and the previous week’s 0.8074 high, which will provide strong resistance.
The downside will again see bids at 0.7950, a break of which would head back to 0.7925 (100 HMA) and to 0.7807 (200 HMA). A further slide would revisit yesterday’s session low at 0.7885 and Monday’s 0.7875 low. Beyond this, – unlikely today – the downside will see bids at last Friday’s low at 0.7862, which is backed up by the 100 DMA at 0.7850 and the 100 Month MA at 0.7810 (also the 50% pivot of 0.75320.8079). Under here would open up the chance for a return to last week’s 0.7785 spike low, seen following the RBA rate cut, and then to 0.7738 (61.8% of 0.7532/0.8079).
Neutral, although the short term charts do appear to want to take another look back towards 0.7900. Wait for the data to find out.
Economic data highlights will include:
China Industrial Production, Retail Sales, Urban Investment, New Loans.
Jim LanglandsFX Charts www.fxchartsdaily.com
