AUD/USD: 0.7305EUR/USD: 1.1475Weak economic data from the US in the form of the Retail Sales, PPI & Beige Book have combined to put the dollar and the stock markets under further pressure today. It could be a similar story in the coming session as the market awaits the US CPI data, where a weak reading would raise further doubts about whether the Fed will be able to raise interest rates this year. Asia will kick off today with the Australian Unemployment data and some secondary Japanese data, although there is little to come from Europe so wit could largely be a sideways session until we see the US inflation figures
Yesterday's dovish statement from the governor of the RBNZ, along with the soft Chinese inflation data, which kept the Aud under pressure for much of the session has now pretty much been recovered, as the US dollar has weakened on all fronts after the release of the soft Retail Sales/PPI, allowing the Aud to squeeze higher to where it currently sits, back at 0.7300
It is going to be another busy one today for the Aud with the release of the September Unemployment data (exp +5K, 6.3%, PR: 65%). Also due will be the WBC Leading Index, Consumer Inflation Expectation and New Vehicle Sales.
The short term charts look rather mixed and thus it could be a choppy session, but with the dailies still pointing higher buying dips would still appear to be the play for medium term traders.
Above 0.7300, further minor resistance levels would be seen at 0.7325 and 0.7345, while stronger resistance still lies at 0.7375/80 (100 DMA/23.6% of 0.8162/0.6900). Above here though would head on to the major descending trend resistance, currently at 0.7395, 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).
Back to the downside, minor support sits at 0.7275, 0.7260 and 0.7235 ahead of the 200 HMA at 0.7215 and the session low of 0.7197. Under here would see a deeper correction towards the 50% pivot of 0.6936/0.7345, which lies at 0.7158 although I don’t see the Aud anywhere close to here today. Further out, the next supports come in at 0.7105 (61.8%) and at 0.7040 (76.4%).
Economic data highlights will include:
Unemployment, WBC Leading Index, Consumer Inflation Expectation, New Vehicle Sales.
Jim LanglandsFX Charts
