AUD/USD: 0.7990EUR/USD: 1.1310In the absence of any major data, higher US Treasury yields have allowed the dollar to make a minor recovery today, while at the same time the Euro has been weighed down by ongoing concerns over what is going to happen to Greece. It will be a more lively session coming up, starting in Asia with the RBA Minutes and the RBNZ Inflation Expectations. Later on the UK CPI will be released, while EU gets the German/EU ZEW Economic Sentiment Survey, EU Trade Balance and the CPI. From the US comes the Building Permits, Housing Starts, which will be closely watched for any further weakness, or otherwise, in the US economy that may be likely to give a hint to the timing of any pending US rate rise.
The Aud remains under some pressure today, not helped by the firmer US$ bias and following yesterday’s comments from the RBA’s Lowe. Now back below 0.8000, the Aud is sitting just above the session lows of 0.7976.
Today it will be the turn of the RBA Minutes to drive the direction, and these will be closely watched following the recent rate cut, although coming so soon after the recent SoMP their effect might be somewhat muted. Having said that, yesterday’s speech from the RBA’s Lowe indicated that an easing bias remain in place and acknowledged that the RBA is walking “fine line” in attempting to stimulate the economy with low rates which are are also driving up asset prices, particularly in the residential real estate market.
Technically, a break of the session low, which the 4 hour charts suggest is likely, would take the Aud towards 0.7940/50 where a couple of rising trend support line lie, a break of which would see the Aud head back towards 0.7920 (38.2% of 0.7532/0.8162) and then to 0.7900. Below this may be a bit ambitious today, but further support would arrive at 0.7885 and at 0.7850.
A return to the topside will find sellers at 0.8000 and at the 100 HMA at 0.8040 and the session high at 0.8050.
Selling rallies towards 0.8000/10 seems to be the plan, with a SL somewhere around 0.8055.
Economic data highlights will include:
CB Leading Indicator, RBA Minutes.
Jim LanglandsFX Charts www.fxchartsdaily.com
