AUD/USD: 0.7405EUR/USD: 1.0975The Greek parliament’s approval of a third bailout program has boosted global equity markets, which were also buoyed by robust corporate earnings, led by Google whose stock soared to another all time high ($677 (A shares, +13%!) in after hours trade). The US$ is firm, after a choppy session underpinned by expectations of higher interest rates following Janet Yellen’s comments over the last couple of days. Commodities remain heavy and generally appear poised for a big move lower – worth watching. The coming session may be largely rangebound for the currency markets given the lack of any real data to drive direction, at least until the US CPI, Building Permits and Rts/Michigan Consumer Sentiment index liven up proceedings. Have a good w/e.
Having reached a new trend low of 0.7349 in Asia yesterday, a combination of profit taking and some large 0.7400 NY cut option expiries saw a slow grind higher through the rest of the session, reaching a peak of 0.7436 on the back of some US$ weakness, before reversing to finish the session back at 0.7400.
While the daily indicators still point lower, the short term indicators are inconclusive and suggest that today may be one of choppy consolidation at close to current levels, with the major direction likely to come from any surprise in the US CPI reading late in the session.
The topside would find decent sellers at the session high at 0.7435, (200 HMA), above which could see a squeeze back towards 0.7470 and then 0.7485. Beyond this looks tricky today, but if wrong, would see a run to 0.7500 and even towards 0.7540 (38.2% of 0.7828/0.7349).
The downside will find buyers today at 0.7375/80 ahead of the session low at 0.7349. A break of this (unlikely, today) would then target 0.7300 and the Fibo extension support at 0.7288 (100% of 0.8162/0.7598) from 0.7848(Blue Fibo structure on chart). Below this, there is then little to hold the Aud up until we reach 0.7200, which could appear on the horizon very quickly once the momentum, begins to build, albeit unlikely today.
Economic data highlights will include:
CB Leading Indicator, WBC Leading Indicator, China FDI, New Loans
Jim LanglandsFX Charts www.fxchartsdaily.com
