AUD/USD: 1.1190EUR/USD: 0.7085The US$ has been generally choppy but rangebound today, but has finished the US session by making some gains, in mixed trade against the majors, while the commodity bloc have had a solid session. Equities have had a good run higher since Friday’s NFP result diminished any chance of an October rate hike – with the Fed possibly holding off from any change in rates until Q1 2016. Today’s main event will be the RBA Meeting, at which the statement will be the main focus but with very little chance of any change to policy. Later in the day, Mario Draghi and then the Fed’s Williams will both be speaking. Tomorrow sees the BOJ Meeting at which no change is expected although speculation of an easing is growing.
AUDUSD has had a good day in trading up to 0.7110 as market perception of a US rate hike are delayed until 2016, before easing back to currently sit at 0.7085.
The RBA will be meeting today, and while no change is expected to Monetary Policy, the Statement will be closely scrutinised for any future guidance. A dovish outlook would probably put the Aud under renewed pressure, although with the Fed seemingly unlikely to hike rates in October, or indeed December, any downside for the Aud could be somewhat limited as yield players sit on the bid. If the RBA are a little more upbeat about the econony, then we could see the Aud take out the session highs for a further squeeze to the topside.
If so, above the 0.7110 session high (0.7108: 50% pivot of 0.7279/0.6938),the Aud could then head on towards 0.7145 (61.8%), 0.7158 (22 Sept high) and then to 0.7198 (76.4%). Above here could see a return to the post FOMC Meeting high of 0.7277, although this is some way off at this stage, although the momentum indicators do seem to hint of a squeeze to the topside, so buying dips would be the favoured strategy right now.
To the downside, initial buyers will arrive at the 0.7041 session lows, below which the 200 HMA and minor rising trend support currently sit at around 0.7020/25.
Further out, albeit probably not today, once back below 0.7000 we might expect another test of 0.6980, below which could revisit 0.6950 and then the 0.6936, 29 Sept low. Under here would open up 0.6900, below which there is little support until the April 2009 low at 0.6855. Anywhere down here looks unlikely to be seen in the coming session but beneath 0.6855 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.
Economic data highlights will include:
RBA Interest Rate Decision/Statement, Trade Balance, China National Day..
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