AUD/USD: 0.7210EUR/USD: 1.0890The US$ traded in mixed fashion today, giving back the previous day’s gains against the Euro, Yen and Chf, while moving higher against the Aud, Kiwi and Sterling. It could be a similar story today, with not a whole lot due from the EU or the US but with the Chinese inflation numbers coming up, and which are likely to be the main focus of the day. Elsewhere, Australia gets the WBC Consumer Confidence and Home Loans data, and then later on the German Trade Balance, Current Account and the US Wholesale Inventories are all due.
AUDUSD headed lower on Tuesday, pressured by the outlook for commodities and also from yesterdays underwhelming Chinese Trade Balance, and which came ahead of more Chinese data today. After having fallen to a low of 0.7186, the Aud has recovered from there to currently sit just above 0.7200.
The Chinese CPI will be the focus on Wednesday (exp 1.4%yy, -0.1%mm), with the WBC Consumer Confidence and Home Lending data also likely to produce some volatility, and the likelihood of further losses for the Aud if the data under-performs.
Technically, a break of the session low (0.7185: 100 DMA), would open the way towards the 30 Nov low at 0.7170 (200 DMA) and then to 0.7155 (61.8% of 0.7015/0.7385). While the indicators are now generally aligned to point lower, the 100/200 DMAs should provide decent support and may slow the momentum. However, below 0.7150 would then open the way for a steeper fall to 0.7100 (76.4%) and to 0.7070 (18 Nov low), albeit that this looks some way off at this stage.
To the topside, minor Fibo resistance lies at 0.7232 (23.6% of 0.7385/0.7186) and again at 0.7261 (38.2%) and comes ahead of 0.7270 (200 HMA) and 0.7295 (100 HMA).
Economic data highlights will include:
WBC Consumer Confidence, Home Loans Investment Lending for Homes, China CPI, PPI, New Loans.
Jim LanglandsFX Charts
