AUD/USD: 0.7025EUR/USD: 1.0720It has been a relatively steady session in the absence of any economic data and it may be a similar story today given the Remembrance Day holidays in both the EU and the US. Asia could have an active session though, with the release of Chinese Retail Sales, Urban Investment and Industrial Production being the focus. Elsewhere, the WBC Consumer Confidence and the Japanese Machine Tool Orders will be released. Later on both Mario Draghi and Mark Carney will be speaking at the BOE Open Forum
Tuesday has been steady for the Aud trading a similar range to Monday (0.7018/64) range, leaving the overall outlook unchanged, with a general bias towards the downside.
China will be the main point of focus, with the release of the Retail Sales, Industrial Production, Urban Investment all coming up. Following on from yesterday’s soft CPI outcome, more weak numbers today would most likely see the 0.7000 area come under sustained pressure. Also due today will be the WBC Consumer Confidence which could provide some minor directional price action.
AUDUSD today traded down to 0.7018 but again found the support in the 0.7020 to be solid although we are currently sitting close by and an eventual break would then head to 0.7012 (76.4% of 0.6900/0.7381) and to 0.7000, where the minor rising trend support now sits. A break of this would allow a return to 0.6936 (29 Sept low) and to 0.6900 (4 Sept low).
If we do see a move to higher ground, we could see another short squeeze towards 0.7070, (which would take us back above the base of the daily cloud (0.7060)), beyond which would then open the way towards 0.7090 (100 HMA) and to 0.7105 (23.6% of 0.7382/0.7022), although if so this would appear to be a good medium term sell opportunity. Above here looks unlikely, but further offers would arrive at 0.7120 (200 HMA).
As before, I prefer to play it from the short side although we still need to leave room for a squeeze towards 0.7100. Stops need to be above 0.7130, or ideally above the minor descending trend resistance, currently at 0.7170.
Economic data highlights will include:
WBC Consumer Confidence, Wage Price Index, China Retail Sales, Industrial Production, Urban Investment.
Jim LanglandsFX Charts
