AUD/USD: 0.7228EUR/USD: 1.1025The US$ is lower on all fronts today as risk aversion ruled market sentiment, pressured by a selloff in US stocks. Today is going to be dominated by Central Bank announcements on interest rates, with the RBNZ having already cut rates early on Thursday, by 25 bp (from 2.75% to 2.5%). Later on, the BOE and the SNB meetings are both due. No major changed are in the wind from the BOE, although there is some doubt that the SNB could follow the lead set by the ECB last week, which would produce some added volatility in the Swiss pairs. Elsewhere, the Australian Unemployment data will be closely watched but that aside there is nothing due from the EU and only secondary data to come from the US - Jobless Claims, Export Price Index, and Monthly Budget Statement.
Yesterday’s Chinese inflation data underpinned the Aud during the Asian session although it got very choppy in the EU/US, falling to 0.7170 before rising quickly to 0.7245 and then falling again, to trade pretty much unchanged on the day, currently at 0.7225.
The November employment data for Australia is due today, which is always provides some short term volatility. The expectation is for -10K, a headline rate of 6% and a PR of 65%.
Support will arrive at 0.7190 (100 DMA) and again at the trend low at 0.7170, where a minor double bottom (30 Nov low) and the 200 DMA should be decent support, but a break of which would head towards 0.7155 (61.8% of 0.7015/0.7385). While the indicators are now generally aligned to point lower, the 100/200 DMAs should again 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.
Back above the session high of 0.7244 will find sellers at 0.7252 (38.2% of 0.7385/0.7170), at 0.7270 (200 /100HMAs) and then at 0.7277 (50%) and at 0.7302 (61.8%).
The indicators are contradictory and more choppy trade looks to be in store, although selling rallies still seems favoured ahead of next week’s FOMC and also on the outlook for lower commodity prices.
Economic data highlights will include:
Consumer Inflation Expectation, Unemployment.
Jim LanglandsFX Charts
