AUD/USD: 0.7915EUR/USD: 1.1145ECB comments on negative interest rates combined with a very weak German ZEW and then later, some strong US housing data, to send Treasury yields and the dollar sharply higher against the EU majors today, while Cable suffered because of the first negative CPI reading since 1960. Commodities did not like the stronger dollar and headed sharply lower, dragging the commodity bloc currencies with them. Today will focus on the FOMC Minutes for further clues as to when the Fed might be thinking of raising rates. Before then, the RBA's Lowe will be speaking again, ahead of the Australian Consumer Confidence figures. Japan gets the GDP and in Europe the German PPI and the BOE Minutes will be released. It will be another busy session.
The Aud has been pressured lower, below the Asian low, after stops were triggered following the solid US housing data, sending the Aud below 0.7950 and down to the session low of 0.7905, from where we have seen the mildest of bounces.
The downside still seems to be favoured, at least by the look of the 4 hour charts although the hourlies are now a little oversold, but appear to be building a bear flag formation. A break of 0.7900 would send the Aud towards the 8 May low at 0.7862, the 100 DMA at 0.7840, and then below 0.7800, to the spike low seen after the RBA rate cut, at 0.7785.
The topside will now find sellers at 0.7950 and then at 0.7970 ahead of the 200 HMA at 0.7985 and the psychological 0.8000, where the descending trend resistance line from the 0.8162 spike high also currently lies.
Today’s main feature will be another speech by the RBA's Lowe, who may again take the opportunity to kick the Aud lower, and then the WBC Consumer Confidence, from which we might see a small uptick following the recent RBA rate cut although any decent rally towards the 200 HMA (0.7985) currently looks to be a sell opportunity.
Economic data highlights will include:
RBA Lowe Speech, WBC Consumer Confidence..
Jim LanglandsFX Charts www.fxchartsdaily.com
