AUD/USD: 0.7115EUR/USD: 1.0645Stronger US inflation data underpinned the dollar and stocks today, although stocks did give up most of their early gains after another terrorist alert, this time in Germany. The main focus today will be on the FOMC Minutes which should give us a little more insight into the Feds thinking towards the chances of a December rate hike, and which will be helped along by a bit of US data including the US Housing Starts, Building Permits and speeches from the Fed’s Lockhart, Mester and Dudley. That aside there is little else to come either from Asia or from the EU. The Non-MP ECB Meeting will be the main focus, which will also include the EU Construction Orders.
The Aud has had a choppy session but is currently not too far from the levels seen this time yesterday after bouncing from a low of 0.7072, and currently sits at 0.7120, below its highs of 0.7140, leaving the technical points intact and further choppy trade the likely outcome.
Further losses could see a return to the session low at 0.7072, a break of which would open the way to further declines towards 0.7065 (minor), 0.7050 and to the 0.7015/20 area which has recently provided decent support. Below there, further bids will arrive at 0.7012 (76.4% of 0.6900/0.7381) and then 0.7000. A break of this would then open the way for a steeper decline towards 0.6936 (29 Sept low) and to 0.6900 (4 Sept low) although at this stage this seems unlikely to be seen for a while.
A short squeeze could see a move back beyond the session high of 0.7040, above which could open the way towards last Friday’s high (0.7158), which would mean a sustained break of the minor descending trend resistance and could then see a move towards 0.7195 (50% of 0.7381/0.7015). Above 0.7200 would head on towards 0.7210 (descending trend resistance), 0.7223 (4 Nov high) and to 0.7240 (61.8%) but seems unlikely to be seen for a while.
The charts are mixed, not suggesting too much in either direction, although the dailies are looking mildly positive, which could allow a squeeze towards the topside if today's secondary data is supportive. On the other side of the coin, further falls in commodity prices, which seems quite likely, would again have the Aud under pressure.
Economic data highlights will include:
CB Leading Indicator, WBC Leading Economic Index, Wage Price Index.
Jim LanglandsFX Charts
