The US dollar is generally under some mild pressure today as traders cut bets that the Fed will hike rates at next week’s FOMC Meeting. The overall outlook appears set to remain rather choppy until we see the result of the meeting, next Wednesday, (early Thursday; Asia) and further, mild dollar losses could lie ahead. US stocks have had a better session, as have commodities, helping the general improvement in risk sentiment. Today will get some secondary data, beginning with the NZ PMI. Later on the German CPI will be the focus in Europe ahead of the US PPI and the Rts/Michigan Consumer Sentiment Index. Have a good w/e.
AUDUSD is a little stronger today, assisted by yesterday’s jobs data as well as the generally soft US dollar, after having overcome the earlier gyrations caused by the RBNZ rate cut. Firmer commodity prices in the session did no harm either.
The early session spike lower to 0.6945, seen after the jobs data, has since been reversed and once 0.7000 had successfully been regained, there has been little looking back, with the Aud closing the US session just below its 0.7098 highs, currently at 0.7080.
There is some mild bearish divergence on the hourly charts which could limit further gains today, although both the 4 hour and the daily charts do look quite positive, so a retest of 0.7100 would not really surprise at some stage. Above 0.7100 would lead the Aud to the Fibo resistance levels which lie at 0.7122 (23.6% of 0.7848/0.6900) and then at 0.7200 (23.6% of 0.8162/0.6900), where the major descending trend resistance also currently lies. Prior to reaching 0.7200, the 1 Sept spike high at 0.7152 will find interested sellers.
On the downside buyers will be seen at 0.7040/50, 0.7015 (200 HMA) and at 0.7000 (100 HMA). Below here looks unlikely today, but further support would arrive at 0.6945 (session low) and then at 0.6900.
Although looking rather distant for the time being, once back beneath 0.6900, there is little support to be seen until the April 2009 low at 0.6855, below which would then suggest a run towards 0.6773 (June 2004 low). A break of this would then open a black hole, in terms of support, until we reach the major Fibo support at around 0.6250 (76.4% of 0.4773/1.1082), which ties in with the lows seen in Feb 2009.
A test of 0.7100/25 looks possible, although there is no data today to drive the direction.
Jim LanglandsFX Charts
