AUD/USD: 0.7420EUR/USD: 1.0935The US$ is broadly weaker today, mostly driven by covering of long positions on the back of a general feeling that the tensions in Greece have eased now that an agreement with the creditors has been reached , albeit possibly temporarily, but giving the Euro a reprieve, . The commodity bloc also had a positive session, with both the Aud and Kiwi making good gains, ahead of today’s Australian CPI/Glen Stevens speech, and tomorrow’s RBNZ IR decision. Some under-performing corporate earnings saw US stocks fall around 0.5% (S+P) /1.0%(DJI). Today will again be rather thin on the ground with regards to data. Aside from the Australian CPI/WBC Leading Index/ RBA Governor Stevens speech, the main events of the day will be the release of the BOE Minutes and then the US House Price Index, Existing Home Sales, Markit Services PMI.
After a choppy Asian session, trading down to a 0.7340 low, the Aud took off in the US when general US$ selling took hold, spiking to a high of 0.7448, before settling at 0.7425.
Today looks towards the WBC Leading Index and the domestic inflation numbers to provide a guide (exp 0.8% qq, 1.7%yy. Trimmed mean: exp 0.5%qq, 2.2%yy) after which, a speech from RBA Governor Stevens is due at 1.00 AET Sydney time when he will give his views on the economy and policy, with a Q&A to follow.
Technically, the bounce in the Aud looks as though it may have the legs, in the near term, to head back to the session high, beyond which would open the way towards last week’s high at 0.7488 and even to 0.7500. Beyond here, which may be a struggle today, would head towards the Fibo resistance at 0.7526 (38.2% of 0.7848/0.7327).
Back below 0.7400 would find keen buyers at 0.7385 (100 HMA) and at the 0.7340 session low. Below this, the 0.7327 trend low would provide decent support ahead of 0.7300, a break of which – unlikely in the near term – would head to 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.
Look for a choppy session, close to 0.7400-50.
Economic data highlights will include:
WBC Leading Indicator, CPI, RBA Governor Stevens Speech.
Jim Langlands
FX Charts
www.fxchartsdaily.com
