AUD/USD: 0.7245EUR/USD: 1.0640The Aud, Nzd and Cad have all enjoyed a solid session, underpinned by the combination of a slightly softer US$ and by stronger commodity prices, which in turn came about due to some safe haven demand following the shooting down of the Russian jet over Turkey. Elsewhere the US$ is slightly weaker against the majors, with the exception of Cable which headed lower after some dovish comments from a BOE Economist. Today will be a busy one with plenty of US data, headed by the Durable Goods and with US traders looking to square up ahead of the Thanksgiving holiday. Other points of focus will be a speech by the RBA's Debelle, while from the UK we get the Chancellor's Autumn Forecast.
The US$ is under some pressure against the commodity bloc, with the Aud currently at session highs and attempting to take out 0.7250, helped along by improved commodity prices which in turn are being assisted by the weaker US$. On the back of this and some safe haven buying after the Russian jet got shot down, Oil and Copper are both up by 2.5% - 3.00%, while Gold is up 0.7%.
Today is thin on the ground for domestic data (Construction Work Done – Q3) although the RBA's Debelle will be speaking in the European session, and it will be the US$/Commodities that again dominate sentiment..
As we said yesterday, the dailies retain a positive bias and nothing has changed, so if we do break above 0.7250 – right here, it could open the way to an acceleration towards 0.7270 (minor) and then to 0.7295 (76.4% of 0.7381/0.7015) and to 0.7300. Beyond here seems unlikely, although if wrong, the next realistic targets would be seen at 0.7363 (16 Oct high) and then at 0.7381 (12 Oct high).
If the Aud fails here, then the initial downside targets will be at 0.7225 and 0.7200, which will provide minor supports ahead of the session low at 0.7185. Below this would open the way to the previous session low at 0.7158 (0.7160: 38.2% of 0.7015/0.7249, below which, the 200 HMA is at 0.7145. Further Fibo levels come in at 0.7130 (50%), 0.7105 (61.8%) and at 0.7070 (76.4%) although it looks unlikely that we head much below 0.7200 today.
Look for a choppy session, possibly confined to 0.7200/0.7270, but with the longer term strategy of selling into strength remaining the favoured play. As before, 0.700/0.7300 until the Fed meeting on Dec 16 would not surprise.
Economic data highlights will include:
Construction Work Done (Q3), Speech: RBAs Debelle.
Jim LanglandsFX Charts
