AUD/USD: 0.7000EUR/USD: 1.1175An early US$ selloff has been has been reversed at the NY close after Fed Chair Janet Yellen commented that we should expect a US rate hike later this year. Most pairs sit roughly where they were this time yesterday with the big winner of the day being Gold, which saw a rise of US$21. Today will be busy with the focus being on the US GDP, but also due are the Rts/Michigan Consumer Sentiment Index, US Services/Composite Flash PMIs, as well as speeches from the Buba’s Weidmann and Fed Board Member Esther George.
AUDUSD was sold aggressively in Europe, to as low as 0.6938, as risk sentiment turned sour, although it then recovered all its lost ground, and more, to sit at 0.7030 ahead of Janet Yellen’s speech.
Her outlook of a rate hike later in the year has seen the Aud fall quickly back to 0.6980, leaving the outlook choppy, but with a bias to the downside, although the 4 hour charts are oversold and may limit any real directional action today.
If we do head lower, then look for a run back to 0.6945 (10 Sept low) and then to today’s session low of 0.6935 ahead of a test of 0.6900. As we said before, once back below 0.6900, there is little support 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
The topside will again see sellers at the 0.7030 area, above which would head towards 0.7042 (session high) and on to the Fibo resistance at 0.7068 (38.2% of 0.7279/0.6938) and then, above the previous session high of 0.7089, seen before the release of Wednesday’s China data, to the next Fibo level at 0.7108(50%).
Jim LanglandsFX Charts
