AUD/USD: 0.7730EUR/USD: 1.0870The dollar has been the big winner today in making good gains against all its counterparts, while stocks and commodities have taken a hit and mostly headed sharply lower. Generally healthy US data boosted the chance of a near term rate hike by the Fed, while Greece’s financial crisis and signs of growing opposition to austerity, after the weekend local elections in Spain, weighed on the Euro, Chf and Cable. The commodity bloc currencies all headed lower, while US$/Jpy is at 8 year highs and looks to be building steam for a much stronger rally. There is little of significance to move markets today, so it may be a session of consolidation while traders prepare themselves for the provisional US GDP, due Friday.
Having remained bid through much of the Asian session, in reaching a high of 0.7839, the Aud finally gave up swimming against the tide and has since headed south through the European and US sessions, reaching a low of 0.7726, where it has run into the daily cloud top which should provide some support today.
While the hourlies are now somewhat overbought and may need a session to recover, the 4 hour and daily indicators point lower, so a test of 0.7710/15 (23 Apr low/daily cloud base) and then to 0.7682 (76.4% of 0.7532/0.8162) should not be ruled out. A break of this would then head towards the rising trend support, currently at 0.7635, a break of which would open up the path to 0.7600 and an eventual retest of the 0.7532 trend low, but which is going to take a while.
On the topside, sellers will appear at 0.7750 and again at 0.7770. Much above here would seem unlikely today, and 0.7800 would seem out of reach. If wrong, then further offers will arrive at the descending trend resistance, currently at 0.7830, where the 100 HMA and Fibo resistance (23.6% of 0.8162/0.7726) will also provide protection. The 200 month MA is also at 0.7815 and while I don’t think we are going above it again for a while, it has acted as a pivot for the Aud for the last 5 months and could continue to do so.
The RBA’s Lowe speaks at the Reuters Regulatory Summit later.
Economic data highlights will include:
WBC Leading Index, Construction Work Done.
Jim LanglandsFX Charts www.fxchartsdaily.com
