AUD/USD: 0.7170EUR/USD: 1.1285The US$ is under a bit of pressure today although the overall rangebound trade of recent sessions still dominates the price action. Commodities, have been the main wiiners in today's session, based in part on the fact that the Fed seem unlikely to raise rates ahead of 2016. There is little economic data out of either the EU or the US today so it may well be rangebound once again while waiting on the outcome of tomorrows FOMC Minutes. The main event of the day wil be the BOJ Meeting altough no change is expected at this meeting, but withthe market looking forward to the next one, at the end of October, when the BOJ will announce their economi growth outlook.
The Aud has benefitted from the outcome of yesterday's RBA meeting and rallied quickly to 0.7134 in Asia before making further progress as the session wore on, to reach the session high at 0.7172 late in the US session. The outlook from the various economists was rather mixed, between those expecting a slight uptick in local growth to those expecting a further deterioration. Overall, the outlook for what happens in China and in the US is probably more important to the direction of Australian interest rates over the next three months than what happens in the domestic economy, which looks set to crawl along at its current slow pace. Today sees the AIG Construction Index.
Technically the Aud has now taken out the 0.7158, 22 Aug high and looks set to approach 0.7198 (76.4%). Above 0.7200 could see a return to the post FOMC Meeting high of 0.7277, with minor interim resistance seen at 0.7230. The momentum indicators do seem to suggest a further squeeze to the topside, so once again; buying dips would be the favoured strategy right now.
Dips will find demand at 0.7145/50 ahead of minor support at 0.7135 and then at the Fibo support at 0.7115 (23.6% of 0.6936/0.7169). Back below 0.7100, which currently looks unlikely, would then revert to 0.7080 (38.2%) and then to the 0.7041 session low seen yesterday, where the rising trend support also now lies and should therefore be strong.
Economic data highlights will include:
AIG Construction Index.
Jim LanglandsFX Charts
