AUD/USD: 0.7205EUR/USD: 1.1235It has been another choppy day for the FX markets in the absence of any major data, although Cable, Aud and Kiwi have all managed to squeeze higher. That could change later today, with the BOE Meeting and the FOMC Minutes both due, each of which could supply some directional moves. Aside from these, other interest will focus on the German Trade Balance, US Jobless Claims and Fed speeches from Bullard/Kocherlakota. Note that China is back from Golden week and will add to the liquidity.
The commodity bloc has continued to benefit from improving risk sentiment on the back of the increasing likelihood of a delayed rate rise from the Fed, possibly until Q1 2016, with the Aud being no exception, after having seen a squeeze up to a high of 0.7234, currently sitting at 0.7210, having eased back in line with the profit taking dip in the equity markets..
Above 0.7234, the next target would be the post-FOMC Meeting high of 0.7277. The momentum indicators do hint at a further squeeze to the topside, although the hourly charts are overbought and thus progress may be sluggish in the absence of any major domestic data today and some consolidation may be necessary. Above 0.7280 though, would then head to 0.7300 and on towards the 21 Aug high at 0.7359 and on to 0.7380 (100 DMA/23.6% of 0.8162/0.6900), which will be a high hurdle to overcome at the first attempt.
Dips to back below 0.7200 will find bids at 0.7175 (minor) and then at 0.7160 (23.6% of 0.6936/0.7234). Below this, 0.7120 (38.2%) and 0.7100 (100 HMA) will see further support although unlikely to be visited today it would seem.
Look for a day of choppy consolidation, with any real direction likely to come from the FOMC Minutes, although note that China is back from Golden Week today and will provide increased liquidity..
Jim LanglandsFX Charts
