AUD/USD: 0.7220EUR/USD: 1.1380The dollar is, once again, mixed today after a session of generally soft global economic data and some dovish comments from various central bankers, with Cable and the commodity bloc being hit particularly hard. It could be more of the same in the coming session, with further important data due for release, kicking off with the Chinese CPI and then later on, the US Retail Sales. Also of note will be the release of the WBC Australian Consumer Confidence figures, the EU Industrial Production, UK Unemployment and US Business Inventories.
The Aud had a tough session today, unable to reach the previous session high of 0.7381, and instead falling to a low of 0.7253 in the US, on the back of a combination of weak global data, headed by the soft Chinese imports. As I write, the Aud is making new lows in early Asian trade on the back of some comments from across the Tasman, where the RBNZ Governor has just said that further rate cuts in NZ are likely, which has taken the Kiwi lower, dragging the Aud with it.
Today will be another busy one for the Aud, which gets to see the WBC Consumer Confidence and the NAB Business Confidence/ Conditions Q2 although the major focus will be on the China CPI (exp 0.5%mm, 1.8%yy) and the PPI (exp -5/9%yy).
The shorter term techs still point lower and if we get below the session low 0.7250, which seems likely, the Aud will find bids at 0.7235 (minor) and then to 0.7210 (38.2% of 0.6936/0.7345). Under here, the 200 HMA sits at 0.7190 and the 50% pivot of 0.6936/0.7345 lies at 0.7158 although I don’t see the Aud down here today unless the Chinese data is very poor. Further out, the next supports come in at 0.7105 (61.8%) and at 0.7040 (76.4%).
While the short term indicators point lower, the dailies remain positive so if we do see a recovery, then offer will arrive at 0.7280 (minor) and then at 0.7300. Further minor resistance levels would be seen at 0.7325 and 0.7345 although I don think this looks to be under pressure today. Further out, strong resistance still lies at 0.7375/80 (100 DMA/23.6% of 0.8162/0.6900). Above here though would head on to 0.7400 and then to the major descending trend resistance, currently at 0.7410, a break of which would trigger plenty of stops and could propel the Aud a fair bit higher, although at this stage this is some way off and I would be surprised to see it above here today. If wrong, the next realistic targets would be at the 11 Aug high at 0.7438 and then at 0.7485 (61.8% of 0.7848/0.6900).
Trading from the short side seems to be the plan today, but with overall direction largely to be dictated by the Chinese CPI outcome
Economic data highlights will include:
WBC Consumer Confidence, China CPI, PPI, NAB Business Confidence/Conditions Q2..
Jim LanglandsFX Charts
