AUD/USD: 0.7670EUR/USD: 1.1220An early European spike higher in the Euro, on the back of higher German bund yields, caused a general selloff in the US$ which then reversed after the improved US jobless claims and saw the dollar further underpinned once Greece announced that that they would delay their IMF debt repayment due today, and instead, will bundle it into the all the other repayments, due by 30 June. A new Berlin meeting of the lenders is now scheduled for Monday. Things don’t look good. In the meantime, today sees the US Jobs data and NFP, so everything appears likely to be on hold until then, barring further news from Athens/Berlin. Ahead of the US data we get the Q1 EU GDP, UK Consumer Inflation Expectation.
The Aud has not really looked back since the disappointing Retail Sales yesterday, although it did squeeze up to 0.7760 in early Europe but gave up on the topside and now trades back below 0.7700, after having been to a low of 0.7663.
Today’s direction will depend on largely on the US jobs data and until then it is likely to be rather choppy, but with a continued, mildly negative bias.
If correct, the points to watch on the downside will be at 0.7665, below which would head to the strong support just ahead of 0.7600. If when this is broken, the Aud would then look to retest the 0.7532 trend low and the RBA’s line in the sand at 0.7500. As we said before, I think we are eventually heading there, and eventually, a fair bit lower, and below 0.7500 there is not too much to support the Aud ahead of 0.7414 (Oct 2010 low), and beneath which there is a bit of a hole until the very strong support at around 0.7200 where two important Fibo levels are lining up (0.7210: 61.8% of 0.4773/1.1082 and 0.7180:76.4% of 0.6006/1.1082).
On the topside, much above 0.7700 today is going to be tricky (100/200 HMAs: 0.7705/15). If we do see it head higher, further sellers will arrive at 0.7760 and at 0.7800 although I don’t see it going close.
Keep an eye on any Greek developments ahead of the NFP, but the bias remains to the downside for the Aud, with lower commodity prices not going to help its cause either.
Economic data highlights will include:
AIG Performance Construction Index.
Jim LanglandsFX Charts www.fxchartsdaily.com
