AUD/USD: 0.7650EUR/USD: 1.0960The dollar had another generally positive session, making new highs against most of its counterparts, particularly against the Yen which headed to a 12 year low, before giving up some of its gains as traders took some profit ahead of the release of today’s US GDP. Today is also month end so we could see some flows on book squaring but the overall theme of a stronger dollar looks likely to continue. Today’s session will also see a bit of Japanese data, including the CPI, German Retail Sales, The Reuters/Michigan Consumer Sentiment Index and the US Personal Consumption/Expenditure figures. NZ and Australia lead off with the Business Confidence (NZ) and the Private Sector Credit (Aust).
The Aud did not like the outcome of yesterday’s Capex figure and remains under heavy pressure just above the new trend low of 0.7617, and with the outlook from this morning’s press suggesting that the economy is in for a very rough ride in the months to come there seems to be plenty of downside potential in the sessions ahead..
Although there is a bit of secondary domestic data out today, the overall direction will be dictated by the outcome of the US GDP and not an awful lot should happen before then. More importantly, next week sees a raft of Australian data, including the RBA Meeting (no change expected), GDP, Retail Sales and Trade Balance and so the price action may stay choppy but rather directionless, above 0.7600, until then.
On the downside, 0.7617 will again see bids ahead of 0.7600 but below which would then head towards eventual retest of the 0.7532 trend low and then towards the RBA’s line in the sand at 0.7500.
The topside will now see sellers at 0.7680 and at 0.7700 ahead of the post-Capex high at 0.7712. Beyond that seems unlikely today, but would head on towards the 100 HMA/descending trend resistance currently at around 0.7750.
Look for a choppy day, but selling into rallies remains the overall theme.
Economic data highlights will include:
HIA New Home Sales, Private Sector Credit
Jim LanglandsFX Charts www.fxchartsdaily.com
